300 REVIEW QUESTIONS CHAPT 8

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Questions and Answers

The formula of the net income model is:

  • MV = NOI x OAR
  • MV = NOI / OAR (correct)
  • MV = GI x GIM
  • MV = GI / OAR

When estimating gross income, you must _______ properties by class, etc., compute measures of central tendency and dispersion, and determine the typical per-unit value.

  • Segment
  • Categorize
  • Stratify (correct)
  • Separate

Property taxes should not be included when estimating________.

  • Gross Income
  • Expense Ratios (correct)
  • Vacancy Ratios
  • Net Income

Which of the following is a factor to consider when stratifying properties for the development of GIMs (Gross Income Multipliers) and OARs (Overall Capitalization Rates).

<p>Building type, Age or condition, Location (D)</p> Signup and view all the answers

The formula of a gross income model is:

<p>MV = GI x GIM (C)</p> Signup and view all the answers

Two basic methods of estimating gross income in mass appraisal are _______ and _____?

<p>stratification and modeling (B)</p> Signup and view all the answers

The dependent variable in gross income models should be:

<p>Gross Income per unit (B)</p> Signup and view all the answers

Independent variables in gross income models should be __________ that are important in explaining differences in gross income.

<p>Property characteristics (A)</p> Signup and view all the answers

The dependent variable in expense ratio models should be the__________.

<p>Overall Expense Ratio (C)</p> Signup and view all the answers

In developing gross income multipliers (GIMs), the appraiser should first stratify the properties and then compute measures of __________ and ____________.

<p>central tendency and dispersion (B)</p> Signup and view all the answers

Flashcards

Net Income Model Formula

MV = NOI / OAR. This formula calculates market value (MV) based on net operating income (NOI) and overall capitalization rate (OAR).

Estimating Gross Income

You have to stratify properties by class, compute measures of central tendency and dispersion, and determine the typical per-unit value.

Excluding Property Taxes

Property taxes are excluded when estimating expense ratios to avoid circular calculations.

Stratifying Factors for GIMs/OARs

Building type, age/condition, and location are key factors to stratify properties when developing GIMs and OARs.

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Gross Income Model Formula

MV = GI x GIM. This formula calculates market value (MV) based on gross income (GI) and gross income multiplier (GIM).

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Estimating Gross Income Methods

Stratification and modeling are two methods of estimating gross income in mass appraisal. These approaches organize and predict income.

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Dependent Variable in Gross Income Models

The dependent variable in gross income models is the gross income per unit, as it is the factor being predicted.

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Independent Variables in Gross Income Models

Independent variables should be property characteristics that explain differences in gross income. These characteristics influence income.

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Dependent Variable in Expense Ratio Models

The dependent variable in expense ratio models is the overall expense ratio. It is the target of the model.

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Developing Gross Income Multipliers (GIMs)

In GIM development, stratify properties then compute measures of central tendency (mean, median, mode) and dispersion (range, standard deviation).

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