#1
Which of the following is NOT a commonly used approach in property valuation?
Expense approach
ExplanationIt's not commonly used for valuation.
#2
What does the term 'Cap Rate' stand for in property investment?
Capitalization Rate
ExplanationIt signifies the rate of return.
#3
What is a 'comparable property' in the context of property valuation?
A property with similar characteristics to the subject property
ExplanationProperty similar to the subject.
#4
Which of the following is NOT a method of property valuation?
Economic approach
ExplanationEconomic approach isn't a method.
#5
What does the term 'vacancy rate' refer to in property investment?
The rate at which properties become vacant
ExplanationRate of property vacancies.
#6
Which of the following factors is typically NOT considered in property valuation?
Tenant's Credit Score
ExplanationCredit score isn't typically factored.
#7
What is the Net Operating Income (NOI) of a property if its gross operating income is $100,000 and its operating expenses are $30,000?
$70,000
ExplanationSubtract expenses from income to get NOI.
#8
What is the formula for the Debt Service Coverage Ratio (DSCR) in property investment?
Net Operating Income (NOI) / Total Debt Service
ExplanationNOI divided by total debt service.
#9
What is the 'highest and best use' concept in property valuation?
The most profitable use legally permissible
ExplanationOptimal legal use for profit.
#10
What does 'IRR' stand for in property investment analysis?
Internal Rate of Return
ExplanationIndicates the rate of return.
#11
What is the purpose of a feasibility study in property investment?
To determine the profitability and viability of a real estate project
ExplanationEvaluates project viability.
#12
Which of the following is a risk associated with property investment?
All of the above
ExplanationAll listed risks are associated.
#13
Which of the following is a limitation of using the sales comparison approach in property valuation?
All of the above
ExplanationAll listed limitations apply.