Prop Valuation

Question 1

Influences on Prop Value

Answer 1

1. social trends
2. economic
3. gov’t & legal
4. environmental & physcial

Question 2

Sales comparison Approach

Answer 2

• quintessential appraisal
• compares value of subject property to comps
• estimates

Question 3

net operating income (noi)

Answer 3

effective gross income-operating expenses

Question 4

cash flow before taxes (cfbt)

Answer 4

net operating income-debt service & capital expenditures

Question 5

cash flow after taxes(cfat)

Answer 5

cash flow before taxes-income taxes

Question 6

grm(gross rent multiplier)

Answer 6

sales price/gross ren

Question 7

effective gross income (egi)

Answer 7

potential gross income-vacancies

Question 8

cap rate

Answer 8

noi (net operating income)/sales price

Question 9

cost approach

Answer 9

-used for unique property w/no comparable or income (ex church)
-2 approaches
replacement& reproduction

Question 10

physical deterioration

Answer 10

ex. roof crumbling

Question 11

functional obsolescence

Answer 11

ex. 1 br in a 5br house (outdated)

Question 12

economic obsolescence

Answer 12

ex. foreclosures, changes in zones- incurable

Question 13

estimated improvement cost

Answer 13

estimated replacement/reproduction cost- depreciaiton cost