IAAO 102 EXAM Question and Answer
(2026/2027) | Real Tested Questions | A+
Verified
• A loan secured by featuring an intrest rate that is constant for the term of the loan is
reffered to as a (an): -✓✓ fixed-rate mortgage
• the underlying principle providing the basis of the income capitalization approach is : -
✓✓ anticipation
• the basis equation used in the income approach to value is: -✓✓ income divided by
rate equals value
• a gross lease requires that in addition to the rent, the tenant must pay: -✓✓ only lease
no other expenses
• when market rent exceeds contract rent the diffrence is known as : -✓✓ deficit rent
• the rental income that a property would most probably command in the open market is
called: -✓✓ market rent
• the anticipation income from all operations of the property adjusted for vacancy and
collection loss, and miscellaneous income is called: -✓✓ effective gross income
• the lease based rent less rent concessions is called: -✓✓ effective rent
• the rate that is the percentage that annual real estate taxes are in relation to the
property's totals value is : -✓✓ effective tax rate
• the ratio of net operating income to effective gross income is called -✓✓ net income
ratio
• the mortgage capitalization rate (Rm) is the ratio between the payments of principle
and intrest on a mortgage to the original amount borrowed and is expressed -✓✓
annually
• how do you calculate GIM? -✓✓ sale price / Annual gross income
• what are the 3 rates compose the total capitalization rate? -✓✓ IRV
• what is the borrowing of funds in hopes of earning a greater return than the cost of
borrowed funds? -✓✓ Leverage
(2026/2027) | Real Tested Questions | A+
Verified
• A loan secured by featuring an intrest rate that is constant for the term of the loan is
reffered to as a (an): -✓✓ fixed-rate mortgage
• the underlying principle providing the basis of the income capitalization approach is : -
✓✓ anticipation
• the basis equation used in the income approach to value is: -✓✓ income divided by
rate equals value
• a gross lease requires that in addition to the rent, the tenant must pay: -✓✓ only lease
no other expenses
• when market rent exceeds contract rent the diffrence is known as : -✓✓ deficit rent
• the rental income that a property would most probably command in the open market is
called: -✓✓ market rent
• the anticipation income from all operations of the property adjusted for vacancy and
collection loss, and miscellaneous income is called: -✓✓ effective gross income
• the lease based rent less rent concessions is called: -✓✓ effective rent
• the rate that is the percentage that annual real estate taxes are in relation to the
property's totals value is : -✓✓ effective tax rate
• the ratio of net operating income to effective gross income is called -✓✓ net income
ratio
• the mortgage capitalization rate (Rm) is the ratio between the payments of principle
and intrest on a mortgage to the original amount borrowed and is expressed -✓✓
annually
• how do you calculate GIM? -✓✓ sale price / Annual gross income
• what are the 3 rates compose the total capitalization rate? -✓✓ IRV
• what is the borrowing of funds in hopes of earning a greater return than the cost of
borrowed funds? -✓✓ Leverage
