IAAO 102 Chapter 3 (SOLVED)

relationships between income & value correct answers interest rates, yield rates, cap rates, GIM are all... Income & cap rate rules correct answers 1. income must match rate 2. rate must match income 3. no exceptions recapture rate correct answers return OF investment rate discount (overall yield rate) correct answers return ON investment rate Overall capitalization rate (OAR / Ro) correct answers 1. relationship b/t NOI & market value of property 2. used in direct capitalization 3. essential that Ro match the NOI from which it's derived 4. theoretically composed of discount & recapture rate of IMPS only (land doesn't depreciate) 5. doesn't distinguish b/t land rate & imp rate components & used in straight-line capitalization unloaded cap rate correct answers does not have ETR component, not for ad valorem taxation & standard overall cap rate used in most appraisal situations loaded cap rate correct answers includes ETR component, commonly used in ad valorem appraisal Five methods of developing an OAR/Ro correct answers 1. Derivation from comparable sales (market) [IRV] 2. Band of investment (mortg & equity) 3. Net income ration