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14 Cards in this Set
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A business property is valued at $100,000. To earn a capitalization rate of 9% of the total investment, the property should return a monthly income of how much? |
(V) $100,000 x (R) 9% = (I) $9,000; $9,000 / 12 = $750 monthly income |
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An appraiser discovered that comparable houses were selling at the rate of $31 per square foot of living area, plus $9,700 for the lot value. If the subject property measures 24 ft by 52 ft and is two stories high, what would be his estimate of value? |
24 x 52 = 1,248 x 2 = 2,496 sq ft living area; 2,496 x $31 = $77,376 house value; $77,376 + $9,700 = $87,076 |
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An apartment building has an annual gross income of $70,000 and operating expenses of $40,000. If the capitalization rate is 10.5%, what is the market value |
$70,000 - $40,000 = $30,000 net; $30,000 / 0.105 = $285,714.29 |
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A property produces $9,700 in income per year. Management fees are $650 per year, and monthly heating cost are $102. If the property is valued at $78,260, what is the owner's capitalization rate? |
10% $102 x 12 = $1,224 annual heat; $1,224 + $650 = $1,874 operating expense; $9,700 - $1,874 = $7,826 net; $7,826 / $78,260 = 0.1 (10%) |
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A rectangular lot 175 feet by 300 feet is sold at $1.75 per square foot. The brokerage fee is 10%. How much is the fee? |
$9,187.50 300 ft x 175 ft = 52,500 sq ft; 52,500 x $1.75 = $91,875; $91,875 x 0.1 = $9,187.50 |
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The market value of a property is $147,400. If properties are assessed at 60% of market value and the tax rate is $51.47 per $1,000, what is the property tax bill? |
$4,552 $147,400 x 0.6 = $88,440; $51.47 / 1,000 = 0.05147; $88,440 x 0.05147 = $4,552 |
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A restaurant has a gross annual income of $400,000 and an operating expense ratio of 80%. If the capitalization rate is 12.5%, what is the value? |
$640,000 $400,000 - 320,000 (80%) = $80,000 NOI $80,000 / 0.125 = $640,000 |
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A property has a gross rent multiplier of 200. The annual net income from rent was $24,000. What is the value of the property? |
$400,000 200 x $2,000 ($24,000 / 12 = $2,000 monthly) = $400,000 |
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If you own a building worth $225,000, what monthly net income is necessary to give you a 15% return? |
$2,812.50 $225,000 x 0.15 = $33,750 annual net; $33,750 / 12 = $2,812.50 |
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An appraiser is estimating the value of a building that has a net income of $5,000 per quarter and a capitalization rate of 8%. The value of this property is $250,000. |
True. (I) $5,000 x 4 = $20,000 / (R) 0.08 = $250,000 |
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An appraiser is using the gross rent multiplier (GRM) method to estimate the market value of a single-family home. The GRM is 200, and the annual rents are $12,000. The value of the property is $200,000 |
True. 200 x $1,000 ($12,000 / 12 = $1,000) = $200,000 |
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The GRM is determined by the value times the rent. |
False. Value / rent = GRM |
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The annual net income for an office building is $20,000. If the owner realizes a 9% return on his investment, the value of the building is $285,714. |
False. (I) $20,000 / (R) 0.09 = (V) $222,222 |
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A broker is asked b the buyer what price per square foot is of the property, which is listed for $350,000 and has 1,800 sq ft. The price per square foot is $150. |
False. $194.44 |
