Session 13: Alternative Asset Valuation Reading 48: Income Property Analysis and Appraisal
LOS d: Contrast the limitations of the direct capitalization approach to those of the gross income multiplier technique.
All of the following are limitations to the gross income multiplier approach for real estate valuation EXCEPT:
A) |
it may be difficult to obtain the necessary data to determine the appropriate capitalization rate. | |
B) |
gross rental income may be inappropriate when building-to-land ratios are different among otherwise comparable properties. | |
C) |
sales prices for comparable properties may not be current. | |
The gross income multiplier approach does not use a capitalization rate.
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