1 for specific request mail
REAL 5080 Final exam, Exam 2 REAl 5080, Exam 1
REAL 5080 Questions and Correct Answers | Latest
Update
The three approaches to value used by real estate appraisers are the
Ans: income, cost, and sales comparison approached
From our class discussion, _____ refers to physical land and buildings,
while _____ consists of the benefits gained from owning land and
buildings
Assignment Expert
Ans: real estate, real property
An operating expense ratio shows the relationship between the property's
Guru01 - Stuvia
operating expenses and the
Ans: effective gross income of the property
2026
a one period rate of return on invested equity would be measured by
Ans: BCTF / equity invested
©
An appraiser expects property values to increase 20% over a five year
holding period. If the seller is expected to suffer 5% selling expenses
when the property is sold at the end of the holding period, what is the
annual rate of appreciation net of selling expenses?
Ans: 2.655%
the overall capitalization rate represents the ____, while the overall
discount rate is the ____
Ans: constant return to annual net operating income, return to annual
net operating income and the return due to the sale of property
which of the following examples best reflects investment value?
, 2 for specific request mail
Ans: value to a specific buyer or seller
an owner/landlord asked you to examine an absolute net lease. the
current rent is $5 per sqft. there is no indication the tenant plans to leave
during the upcoming year. You have also found that operating expenses
for this type of building average $3 per sqft. What is the net operating
income fro the lease?
Ans: $5 per sqft
other things being equal, which would have the lowest cap rate?
Assignment Expert
Ans: a property with increasing rents and property values over the
holding period
Guru01 - Stuvia
you are analyzing a property in which you expect net operating income
to remain constant at $15000 over the next five years. at that time, the
property will be valued by applying a terminal capitalization rate of 9% to
the projected sixth year net income. You believe that the 6th year NOI
2026
will be 6% greater than that of the fifth year. You also believe that you
will suffer 5% selling expenses when the property transacts at the end of
©
the holding period. if 10% is the discount (yield) rate needed to attract
investors, what is the current indicated value of this property?
Ans: 149,734
what term is used to identify the rent that probably would be obtained
for a specific property in the current rental markets?
Ans: market rent
normally, one would expect what relationship between the "going in" and
"going out" cap rate?
Ans: the going out cap rate should be at least as high as the going in
rate
, 3 for specific request mail
the first step of the valuation process, definition of the problem includs
which of the following?
Ans: identifying the property and property rights being appraised
specifying the date of valuation
determining the purpose of appraisal
which of the following expenses (costs) is not considered by an appraiser
in estimating the net operating income of a particular property?
Ans: mortgage payments
Assignment Expert
Ms. Moore owns a 16 unit apartment complex. the market rent on each
Guru01 - Stuvia
unit is $500 per month. It is expected that on average, one unit will be
vacant for the 6 months each year. The annual operating expenses are
estimated to be 39% of EGI. The annual debt service payments are
estimated to be $45,000. If the overall capitalization rate is assumed to
2026
be 9.25% what is the estimated value of the property?
Ans: 613297
©
the landlord notes that the hall carpets needs to be replaced every five
years. it costs $17,500 to replace the roof each time it is replaced. In
determining how much the landlord should attribute to each year's cost
of carpet replacement, which factor would be used?
Ans: sinking fund factor
which of the following calculations is the best definition of the debt
coverage ratio?
Ans: net operating income divided by the mortgage payment
a property is $1,200,000 with a 75% at 9.5% interest over a 25 year term
with monthly payments. If the annual net operating income is $130,000
what is the equity dividend rate?
, 4 for specific request mail
Ans: 10.8%
when using the sales comparison approach, the sales price of which of
the following properties should be adjusted by the appraiser?
Ans: the comparable to the subject property
the historical annual average change in the CPI is 3%. Rather than simply
adjusting rents by the CPI, you decide to be more thoughtful in your
adjustment and take into account the building's age with time. You have
collected data from two buildings of similar location and starting class
(quality). The first building is 3 years old and rents for $11.25 per sqft
Assignment Expert
while the second building is 10 years old and rents for $10 per sqft. what
is the appropriate growth rate to be applied to your estimate of first
Guru01 - Stuvia
period rent?
Ans: 1.70%
holding the height of the building fixed, the price per square foot of
2026
building area ____ as the number of square feet in the structure increases
©
Ans: decreases
in using the cost approach to value, after estimating the "cost new" of an
existing structure, the appraiser next estimates and deducts
Ans: accrued depreciated
what legal interest in real estate is valued by adding the present worth of
cash flows generated using contract rents and the present worth of the
reversion at the end of the lease?
Ans: the leased fee estate
general operating expenses are estimated to be $100,000 at full
occupancy. if only 80% of these expenses are fixed and the building is
65% occupied, what level of operating expenses should you record for
this year under the operating expense portion fo your pro-forma?
REAL 5080 Final exam, Exam 2 REAl 5080, Exam 1
REAL 5080 Questions and Correct Answers | Latest
Update
The three approaches to value used by real estate appraisers are the
Ans: income, cost, and sales comparison approached
From our class discussion, _____ refers to physical land and buildings,
while _____ consists of the benefits gained from owning land and
buildings
Assignment Expert
Ans: real estate, real property
An operating expense ratio shows the relationship between the property's
Guru01 - Stuvia
operating expenses and the
Ans: effective gross income of the property
2026
a one period rate of return on invested equity would be measured by
Ans: BCTF / equity invested
©
An appraiser expects property values to increase 20% over a five year
holding period. If the seller is expected to suffer 5% selling expenses
when the property is sold at the end of the holding period, what is the
annual rate of appreciation net of selling expenses?
Ans: 2.655%
the overall capitalization rate represents the ____, while the overall
discount rate is the ____
Ans: constant return to annual net operating income, return to annual
net operating income and the return due to the sale of property
which of the following examples best reflects investment value?
, 2 for specific request mail
Ans: value to a specific buyer or seller
an owner/landlord asked you to examine an absolute net lease. the
current rent is $5 per sqft. there is no indication the tenant plans to leave
during the upcoming year. You have also found that operating expenses
for this type of building average $3 per sqft. What is the net operating
income fro the lease?
Ans: $5 per sqft
other things being equal, which would have the lowest cap rate?
Assignment Expert
Ans: a property with increasing rents and property values over the
holding period
Guru01 - Stuvia
you are analyzing a property in which you expect net operating income
to remain constant at $15000 over the next five years. at that time, the
property will be valued by applying a terminal capitalization rate of 9% to
the projected sixth year net income. You believe that the 6th year NOI
2026
will be 6% greater than that of the fifth year. You also believe that you
will suffer 5% selling expenses when the property transacts at the end of
©
the holding period. if 10% is the discount (yield) rate needed to attract
investors, what is the current indicated value of this property?
Ans: 149,734
what term is used to identify the rent that probably would be obtained
for a specific property in the current rental markets?
Ans: market rent
normally, one would expect what relationship between the "going in" and
"going out" cap rate?
Ans: the going out cap rate should be at least as high as the going in
rate
, 3 for specific request mail
the first step of the valuation process, definition of the problem includs
which of the following?
Ans: identifying the property and property rights being appraised
specifying the date of valuation
determining the purpose of appraisal
which of the following expenses (costs) is not considered by an appraiser
in estimating the net operating income of a particular property?
Ans: mortgage payments
Assignment Expert
Ms. Moore owns a 16 unit apartment complex. the market rent on each
Guru01 - Stuvia
unit is $500 per month. It is expected that on average, one unit will be
vacant for the 6 months each year. The annual operating expenses are
estimated to be 39% of EGI. The annual debt service payments are
estimated to be $45,000. If the overall capitalization rate is assumed to
2026
be 9.25% what is the estimated value of the property?
Ans: 613297
©
the landlord notes that the hall carpets needs to be replaced every five
years. it costs $17,500 to replace the roof each time it is replaced. In
determining how much the landlord should attribute to each year's cost
of carpet replacement, which factor would be used?
Ans: sinking fund factor
which of the following calculations is the best definition of the debt
coverage ratio?
Ans: net operating income divided by the mortgage payment
a property is $1,200,000 with a 75% at 9.5% interest over a 25 year term
with monthly payments. If the annual net operating income is $130,000
what is the equity dividend rate?
, 4 for specific request mail
Ans: 10.8%
when using the sales comparison approach, the sales price of which of
the following properties should be adjusted by the appraiser?
Ans: the comparable to the subject property
the historical annual average change in the CPI is 3%. Rather than simply
adjusting rents by the CPI, you decide to be more thoughtful in your
adjustment and take into account the building's age with time. You have
collected data from two buildings of similar location and starting class
(quality). The first building is 3 years old and rents for $11.25 per sqft
Assignment Expert
while the second building is 10 years old and rents for $10 per sqft. what
is the appropriate growth rate to be applied to your estimate of first
Guru01 - Stuvia
period rent?
Ans: 1.70%
holding the height of the building fixed, the price per square foot of
2026
building area ____ as the number of square feet in the structure increases
©
Ans: decreases
in using the cost approach to value, after estimating the "cost new" of an
existing structure, the appraiser next estimates and deducts
Ans: accrued depreciated
what legal interest in real estate is valued by adding the present worth of
cash flows generated using contract rents and the present worth of the
reversion at the end of the lease?
Ans: the leased fee estate
general operating expenses are estimated to be $100,000 at full
occupancy. if only 80% of these expenses are fixed and the building is
65% occupied, what level of operating expenses should you record for
this year under the operating expense portion fo your pro-forma?
