IAAO 102 CORRECT ANSWERS AND QUESTIONS SET
A+
✔✔The __________ rate reflects the return ON the investment. - ✔✔Overall yield or
discount
✔✔The ______________ rate reflects the relationship between the real estate taxes
and the value of the property. - ✔✔Effective tax rate
✔✔To obtain the value using the IRV formula, one must _________ the income by the
rate. - ✔✔Divide
✔✔To no twine the value using the VIF formula, one must __________ multiply the
income by the factor. - ✔✔Multiply
✔✔A contract which calls for a fixed minimum base rent and a variable rent (overage
rent) which is based on volume of business, sales, productivity, or use of the property,
or use of the property by the tenant. - ✔✔Percentage lease
✔✔Leases may or may not be in written form. This provides no security for the tenant or
landlord. - ✔✔Month to month - Short term
✔✔The tenant is required to pay all or part of the operating expenses associated with
the real estate. - ✔✔Net lease
✔✔The tenant pays some or all of the property expenses. - ✔✔Single, double or triple
net lease.
✔✔Degrees between the the gross lease - ✔✔Single and double net leases
✔✔May require specific expenses to be paid by either tenant or landlord. - ✔✔Triple
lease
, ✔✔The landlord is required to pay all operating expenses associated with the real
estate. - ✔✔Gross lease
✔✔When this section appears in a lease, it will usually explain the extent of the work
that the landlord is willing to do in the form of a building or improvement allowance. -
✔✔Tenant improvements
✔✔The amount of rent that a property should command in the open market. Also known
as economic rent. - ✔✔Market rent
✔✔Is the rent the tenant is paying according to the lease in affect at the time of
appraisal or analysis. - ✔✔Contract rent
✔✔The amount which contract rent exceeds market rent. - ✔✔Excess rent
✔✔The amount of rent received in accordance with the terms of a percentage clause in
a percentage lease contract. - ✔✔Percentage rent
✔✔Occurs when market rent is greater than contract rent. - ✔✔Deficit rent (leasehold
rent or leasehold income)
✔✔The lease base rent less rent concessions. Used as a common denominator to
compare leases with different provisions. - ✔✔Effective rent
✔✔Includes the entire area of the building. - ✔✔Gross leasable area (GLA)
✔✔Includes only the floor area occupied by the tenant. - ✔✔Net leasable area (NLA)
✔✔What is the difference between gross leasable area and net leasable area? -
✔✔Common area
✔✔One of the three approaches to value in which the appraiser derives a value
indication by converting benefits through ownership of income producing property is the
_________ approach? - ✔✔Income
✔✔The economic principle of __________ states that value is created by the
expectation of benefits to be derived in the future. - ✔✔Anticipation
✔✔The economic principle of _________ states that property's maximum value tends to
be set by the lowest cost or price at which another property of equivalent utility can be
acquired. - ✔✔Substitution
A+
✔✔The __________ rate reflects the return ON the investment. - ✔✔Overall yield or
discount
✔✔The ______________ rate reflects the relationship between the real estate taxes
and the value of the property. - ✔✔Effective tax rate
✔✔To obtain the value using the IRV formula, one must _________ the income by the
rate. - ✔✔Divide
✔✔To no twine the value using the VIF formula, one must __________ multiply the
income by the factor. - ✔✔Multiply
✔✔A contract which calls for a fixed minimum base rent and a variable rent (overage
rent) which is based on volume of business, sales, productivity, or use of the property,
or use of the property by the tenant. - ✔✔Percentage lease
✔✔Leases may or may not be in written form. This provides no security for the tenant or
landlord. - ✔✔Month to month - Short term
✔✔The tenant is required to pay all or part of the operating expenses associated with
the real estate. - ✔✔Net lease
✔✔The tenant pays some or all of the property expenses. - ✔✔Single, double or triple
net lease.
✔✔Degrees between the the gross lease - ✔✔Single and double net leases
✔✔May require specific expenses to be paid by either tenant or landlord. - ✔✔Triple
lease
, ✔✔The landlord is required to pay all operating expenses associated with the real
estate. - ✔✔Gross lease
✔✔When this section appears in a lease, it will usually explain the extent of the work
that the landlord is willing to do in the form of a building or improvement allowance. -
✔✔Tenant improvements
✔✔The amount of rent that a property should command in the open market. Also known
as economic rent. - ✔✔Market rent
✔✔Is the rent the tenant is paying according to the lease in affect at the time of
appraisal or analysis. - ✔✔Contract rent
✔✔The amount which contract rent exceeds market rent. - ✔✔Excess rent
✔✔The amount of rent received in accordance with the terms of a percentage clause in
a percentage lease contract. - ✔✔Percentage rent
✔✔Occurs when market rent is greater than contract rent. - ✔✔Deficit rent (leasehold
rent or leasehold income)
✔✔The lease base rent less rent concessions. Used as a common denominator to
compare leases with different provisions. - ✔✔Effective rent
✔✔Includes the entire area of the building. - ✔✔Gross leasable area (GLA)
✔✔Includes only the floor area occupied by the tenant. - ✔✔Net leasable area (NLA)
✔✔What is the difference between gross leasable area and net leasable area? -
✔✔Common area
✔✔One of the three approaches to value in which the appraiser derives a value
indication by converting benefits through ownership of income producing property is the
_________ approach? - ✔✔Income
✔✔The economic principle of __________ states that value is created by the
expectation of benefits to be derived in the future. - ✔✔Anticipation
✔✔The economic principle of _________ states that property's maximum value tends to
be set by the lowest cost or price at which another property of equivalent utility can be
acquired. - ✔✔Substitution
