11 - Income Capitalization Approach Flashcards
1
Q
The _______ _______ ________ is the relationship or ratio between the sale price or value of a property and it’s periodic gross rental income
A
Gross Rent Multiplier
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2
Q
T/F - The GRM is typically used for storage units and commercial properties
A
False
It is used for SFR’s and up to 4-unit properties
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3
Q
A GRM analysis is effective when the properties being compared have __________ operating Expense ratios
A - Similar
B - Equal
C - Different
A
Similar
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4
Q
Use ________ rent in the GRM, not the contract rent
A
Market
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5
Q
Market conditions (should)/(should not) effect the GRM
A
Should not
Since GRM is a ratio, it should remain fairly consistent as rent rates typically rise at the same rate as sale prices
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