Flashcards in Basic Questions to know Deck (4)
For example, if a building is priced at $1,000,000, and it generates $100,000 in net revenue, its capitalization, or ‘cap rate’ would be what?
Cap rate = NOI/Market price
Market Price= $1,000,000
Which approach is used where the property is difficult to categorize or there are no similar properties to compare to?
1) Cost Approach
2) Direct Comparison
3) Income Approach
What is basically COST APPROACH
You basically find the cost of to BUILD or REPLACE the Building from the ground up.
What is another name for INCOME APPROACH