Deck 13: The Income Approach

Question 1

Operating expenses should include all owner-related expenses.

Answer 1

False

Question 2

In income property appraisal, the gross income multiplier is often considered part of the sales comparison approach.

Answer 2

True

Question 3

A step-up lease is a lease on a walk-up apartment.

Answer 3

False

Question 4

A 5% savings account that has just paid a $500 annual dividend is worth about $25,000.

Question 5

Market rent can be defined as the potential gross rent in an open market.

Question 6

Gross income multipliers normally increase with a decrease in the operating
expense ratio.

Question 7

If you subtract vacancy and credit loss from gross scheduled income, you arrive at the effective gross income.

Question 8

Rent for the manager's unit should be included in the rent forecast.

Question 9

Small income properties are bought and sold only for their tangible amenities.

Question 10

Expenses that are not classified as either variable or fixed should be omitted.