Study guides, Class notes & Summaries

IAAO 102 Questions and Answers Already Graded A Anticipation Value is created by the expectation of benefits to be derived in the future Substitution the prices, rents, and rates of return of property tend to be set by the current prices, rents and rates of return for equally desire able substitute properties. Contribution the value of a component of real estate can be measured by the amount it contributes to net operating income because net operating income can be capitalized into valu...

Anticipation -Answer Value is created by the expectation of benefits to be derived in the future Substitution -Answer the prices, rents, and rates of return of property tend to be set by the current prices, rents and rates of return for equally desire able substitute properties. Contribution -Answer the value of a component of real estate can be measured by the amount it contributes to net operating income because net operating income can be capitalized into value. Market Value -Answ...

Surplus Produtivity Allows us to capitalize land income into an indication of value Return ON Overall Yield or Discount Return OF Wasting Asset or Recapture Leverage The borrowing of funds in hopes of earning a greater return than the cost of the borrowed funds Positive Leverage This is achieved when funds are invested in property, which has a higher rate of return than the cost of borrowed funds Negative Leverage This occurs when the cost of the borrowed funds equals the return on the ...

Surplus Produtivity Allows us to capitalize land income into an indication of value Return ON Overall Yield or Discount Return OF Wasting Asset or Recapture Leverage The borrowing of funds in hopes of earning a greater return than the cost of the borrowed funds Positive Leverage This is achieved when funds are invested in property, which has a higher rate of return than the cost of borrowed funds Negative Leverage This occurs when the cost of the borrowed funds equals the return on the p...

Anticipation Value is created by the expectation of benefits to be derived in the future Substitution the prices, rents, and rates of return of property tend to be set by the current prices, rents and rates of return for equally desire able substitute properties. Contribution the value of a component of real estate can be measured by the amount it contributes to net operating income because net operating income can be capitalized into value. Market Value means the most probable price which ...

Surplus Produtivity Allows us to capitalize land income into an indication of value Return ON Overall Yield or Discount Return OF FWasting Asset or Recapture Leverage The borrowing of funds in hopes of earning a greater return than the cost of the borrowed funds

Anticipation Value is created by the expectation of benefits to be derived in the future Substitution the prices, rents, and rates of return of property tend to be set by the current prices, rents and rates of return for equally desire able substitute properties. Contribution the value of a component of real estate can be measured by the amount it contributes to net operating income because net operating income can be capitalized into value. Market Value means the most probable pric...

A gross income multiplier (GIM), as used in a commercial appraisal, is obtained by dividing the ____________________________. A. sale price by annual gross income B. sale price by monthly gross income C. overall capitalization rate by the sale price D. annual gross income by the sale price - Answer- A gross income multiplier (GIM), as used in a commercial appraisal, is obtained by dividing the ____________________________. A. sale price by annual gross income B. sale price by monthly g...

Capitalization Rate - Answer- A rate used for converting property income into property value Discount Rate - Answer- The rate of return on a real estate investment. It reflects the compensation necessary to attract investors to give up liquidity. Recapture rate - Answer- Provides for the return of the investment in the wasting portion of the asset. this is similar to the depreciation rate for the improvment. Overall /rate - Answer- The direct relationship between annual net income and s...

Value is created by the expectation of benefits to be derived in the future. - Answer- Anticipation This is the underlying principle which provides the basis of the income capitalization approach. - Answer- Anticipation The most probable price a property should bring in a competitive and open market under all conditions requisite to a fair sale. - Answer- Market Value All investors want a return OF their money - Answer- Recapture rate or getting back amount invested All investors wan...