IAAO 102 EXAM

IAAO 102 EXAM ACTUAL EXAM 200 QUESTIONS AND CORRECT
DETAILED ANSWERS|AGRADE
Anticipation Definition - ANSWER: Value created by ghe expectationof benefits to be
derived in the future

Leverage Definition - ANSWER: Borrowing of funds in hopes of earning a greater
return than the cost of the borrowed funds- positive / negative / neutral

Chattel Mortgage Definition - ANSWER: Mortgage only on personal property

Effective Tax Rate Definition - ANSWER: Reflects the relationship between the real
estate taxes and the value of property

IRV formula - ANSWER: Net Operating Income ÷ Rate = Value
Always use annual figures

VIF Formula - ANSWER: Value = income • factor // factor is same as Gross Income
Multiplier - factor = value ÷ income \\ income = value ÷ factor

Real estate lease Definition - ANSWER: Written document in which the rights to use
and occupy land or structures are transferred by the owner to another for a period
of time in return for as specified rent

Lease Defined - ANSWER: Both a contract and a conveyance

Landlord action - ANSWER: Lease fee interest (lessor)

Tenant action - ANSWER: Lease hold interest (lessee)

market rent (economic rent) - ANSWER: Rental income that a property would most
probably command in the open market

Excess rent definition - ANSWER: Contract rent exceeds market rent
CR > MR

Deficit rent definition - ANSWER: Market rent exceeds contract rent
MR > CR

GLA Definition - ANSWER: Gross Leasable Area - includes ALL common area

NLA Definition - ANSWER: Net Leasable Area - includes only floor area occupied by
tenant