jawz

Discontinuous pricing, lack of rental data, and the fact that gross rents may distort appraised values are all limitations of which of the following valuation techniques?

A) The gross income multiplier approach.

B) The direct income capitalization approach.

C) The market extraction technique.

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The direct income capitalization approach does not use gross rents. The market extraction technique is not a valuation technique per se. It is a technique used to determine capitalization rates for the direct income capitalization valuation approach.

jawz

All of the following are limitations to the gross income multiplier approach for real estate valuation EXCEPT:

A) gross rental income may be inappropriate when building-to-land ratios are different among otherwise comparable properties.

B) it may be difficult to obtain the necessary data to determine the appropriate capitalization rate.

C) sales prices for comparable properties may not be current.

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The gross income multiplier approach does not use a capitalization rate.

jawz

Which of the following valuation approaches is only applicable in its application to income-generating properties?

A) Both the gross income multiplier approach and the direct income capitalization approach.

B) Only the direct income capitalization approach.

C) Only the gross income multiplier approach.

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Both valuation approaches are limited to use with income producing properties. Neither approach can provide an accurate value estimate for owner-occupied properties because the benefit derived by the owner is difficult to measure in monetary terms.