Ohio Real Estate Test Questions and Answers 100% Correct

Ohio Real Estate Test Questions and Answers 100% CorrectOhio Real Estate Test Questions and Answers 100% CorrectOhio Real Estate Test Questions and Answers 100% CorrectOhio Real Estate Test Questions and Answers 100% Correct You are preparing a competitive market analysis on a vacant lot you are listing for sale. Which of the following approaches to value will be used in the development of estimated value? A. Cost approach B. Gross rent multiplier C. Income approach D. Sales comparison approach - ANSWER-D. sales comparison approach most applicable to the appraisal of vacant land Cost approach - ANSWER-used for special purpose properties such as a church. the economic belief that informed buyers will not pay any more for a product than they would for the price of producing a similar product that has the same level of utility Gross rent multiplier - ANSWER-ratio of a property's price to gross rental income ex. I buy a rental property for $200,000. I want to produce a monthly rental income of $2,300. We first want to calculate the annual gross income. 12 * 2,300 = $27,600 Gross Rent Multiplier = $200,000/$27,600 = 7.25 This tells you how long it will take you to pay off your property. 7.25 years to pay off. Income approach - ANSWER-a real estate appraisal method used for investors to estimate the value of a property based on the income it generates. ex. An apartments net operating income is $130,000. Utilities are $30,000. Net operating income is $130,000-$30,000= $100,000. Divide by the property's current value which is $750,000. So $100,000 / $750,000 = 13.3% (Cap rate) Sales Comparison Approach - ANSWER-compares a property to other properties in the area with similar characteristics that have sold recently