RESIDENTIAL SALES COMPARISON ACTUAL FINAL PAPER
2026/2027 QUESTIONS AND SOLUTIONS GUARANTEE A+
✔✔Gross Lease - ✔✔A property lease for which the landlord pays all expenses related
to the operation of the property
✔✔Gross Rent Multiplier (GRM) - ✔✔A factor derived from comparable rental data,
which is then used to develop an opinion of value of the subject property.
✔✔Lease - ✔✔Conveyance of a leasehold estate from the fee owner to a tenant; a
contract form which one party pays the other rent in exchange for possession of real
estate
✔✔Leased Fee Estate - ✔✔The landlord's ownership interest in property
✔✔Leasehold Estate - ✔✔An estate that gives the holder (tenant) a temporary right to
possession, without title. Also called Less-than-Freehold Estate
✔✔Lessee - ✔✔A person who leases property; a tenant
✔✔Lessor - ✔✔A person who leases property to another; a landlord
✔✔Market Rent - ✔✔What the property could rent for in the open market if currently
vacant and available
✔✔Net Lease - ✔✔A property lease for which the tenant pays all utilities and certain
expenses, in addition to rent payments
✔✔Net Operating Income (NOI) - ✔✔Income after expenses
✔✔Operating Expenses - ✔✔Day-to-day costs of running a building, like repairs and
maintenance, but not including debt service or depreciation
✔✔Overage Rent - ✔✔A percentage of business sales a tenant's business has
generated paid in addition to rent payments
✔✔Overall Capitalization Rate - ✔✔Used to interpret a property's single year NOI to the
property's value using direct capitalization (Symbolized by Ro)
✔✔Overall Yield Rate - ✔✔Considers a series of annual figures over the entire
investment period as well as reversion
✔✔Potential Gross Income (PGI) - ✔✔The income that could be produced by a property
in a ideal situation, with no vacancy or collection losses.
, ✔✔Reserves for Replacement - ✔✔An amount of money set aside for future
replacement of major items, such as the roof or heating system. Also called Reserves.
✔✔Revisionary Benefit - ✔✔Typically a sum, often stated in a dollar amount, that a
property owner will receive when or if he sells the property at the end of the investment
term.
✔✔Variable Expense - ✔✔Operating expenses necessary to the property, but usually
dependent on the property;s occupancy level.
✔✔Band of Investment - ✔✔A technique for determining an overall capitalization rate by
weighting and combining the various components of an investment.
✔✔Direct Capitalization - ✔✔An income method that takes a property's single-year net
operating income or NOI into a value indication by applying an overall capitalization
rate: NOI / Overall Capitalization Rate = Value
✔✔EGIM - ✔✔A factor derived and applied using EGI - the amount after estimated
vacancy has been deducted from PGI
✔✔Equity Capitalization Rate - ✔✔The capitalization rate applied to the expectation of
return on equity (symbolized by Re)
✔✔IVR - ✔✔A formula or technique that derives an overall caplitalization rate: Income
(NOI) / Value (Sale Price) = Rate
✔✔Mortgage Capitalization Rate - ✔✔A return on the money lent in an investment
(symbolized by Rm)
✔✔Mortgage Constant - ✔✔The ratio between annual debt service and loan principal
✔✔Multiplier - ✔✔A factor that is derived from market data and applied to the subject's
market rent or income to produce a value indication in an income approach
✔✔PGIM - ✔✔A fund factor derived from, and applied to, the total gross income
generated by the property without vacancy being considered
✔✔Rent Roll - ✔✔Briefly details the unit info, such as lease terms, contract rent, as well
as the effective date of the leases that are in place for the property
✔✔Rent Survey - ✔✔A compilation of the rents being generated (and often rent history)
in a particular market for a particular property type.
2026/2027 QUESTIONS AND SOLUTIONS GUARANTEE A+
✔✔Gross Lease - ✔✔A property lease for which the landlord pays all expenses related
to the operation of the property
✔✔Gross Rent Multiplier (GRM) - ✔✔A factor derived from comparable rental data,
which is then used to develop an opinion of value of the subject property.
✔✔Lease - ✔✔Conveyance of a leasehold estate from the fee owner to a tenant; a
contract form which one party pays the other rent in exchange for possession of real
estate
✔✔Leased Fee Estate - ✔✔The landlord's ownership interest in property
✔✔Leasehold Estate - ✔✔An estate that gives the holder (tenant) a temporary right to
possession, without title. Also called Less-than-Freehold Estate
✔✔Lessee - ✔✔A person who leases property; a tenant
✔✔Lessor - ✔✔A person who leases property to another; a landlord
✔✔Market Rent - ✔✔What the property could rent for in the open market if currently
vacant and available
✔✔Net Lease - ✔✔A property lease for which the tenant pays all utilities and certain
expenses, in addition to rent payments
✔✔Net Operating Income (NOI) - ✔✔Income after expenses
✔✔Operating Expenses - ✔✔Day-to-day costs of running a building, like repairs and
maintenance, but not including debt service or depreciation
✔✔Overage Rent - ✔✔A percentage of business sales a tenant's business has
generated paid in addition to rent payments
✔✔Overall Capitalization Rate - ✔✔Used to interpret a property's single year NOI to the
property's value using direct capitalization (Symbolized by Ro)
✔✔Overall Yield Rate - ✔✔Considers a series of annual figures over the entire
investment period as well as reversion
✔✔Potential Gross Income (PGI) - ✔✔The income that could be produced by a property
in a ideal situation, with no vacancy or collection losses.
, ✔✔Reserves for Replacement - ✔✔An amount of money set aside for future
replacement of major items, such as the roof or heating system. Also called Reserves.
✔✔Revisionary Benefit - ✔✔Typically a sum, often stated in a dollar amount, that a
property owner will receive when or if he sells the property at the end of the investment
term.
✔✔Variable Expense - ✔✔Operating expenses necessary to the property, but usually
dependent on the property;s occupancy level.
✔✔Band of Investment - ✔✔A technique for determining an overall capitalization rate by
weighting and combining the various components of an investment.
✔✔Direct Capitalization - ✔✔An income method that takes a property's single-year net
operating income or NOI into a value indication by applying an overall capitalization
rate: NOI / Overall Capitalization Rate = Value
✔✔EGIM - ✔✔A factor derived and applied using EGI - the amount after estimated
vacancy has been deducted from PGI
✔✔Equity Capitalization Rate - ✔✔The capitalization rate applied to the expectation of
return on equity (symbolized by Re)
✔✔IVR - ✔✔A formula or technique that derives an overall caplitalization rate: Income
(NOI) / Value (Sale Price) = Rate
✔✔Mortgage Capitalization Rate - ✔✔A return on the money lent in an investment
(symbolized by Rm)
✔✔Mortgage Constant - ✔✔The ratio between annual debt service and loan principal
✔✔Multiplier - ✔✔A factor that is derived from market data and applied to the subject's
market rent or income to produce a value indication in an income approach
✔✔PGIM - ✔✔A fund factor derived from, and applied to, the total gross income
generated by the property without vacancy being considered
✔✔Rent Roll - ✔✔Briefly details the unit info, such as lease terms, contract rent, as well
as the effective date of the leases that are in place for the property
✔✔Rent Survey - ✔✔A compilation of the rents being generated (and often rent history)
in a particular market for a particular property type.
