A small apartment property is estimated to have potential gross income of $ 25,000. Vacancy and...

  

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A small apartment property is estimated to have potential gross income of $ 25,000. Vacancy and collection losses are expected to average 5 percent over the life of the property. Operating expenses are expected to average about 30 percent of effective gross income. An overall capitalization rate of 12 percent is derived from market transactions of similar properties. What is the market value? $208,333 $138,542 C. $197,917 d. $145,833 a. b. A small apartment property is estimated to have potential gross income of $ 25,000. Vacancy and collection losses are expected to average 5 percent over the life of the property. Operating expenses are expected to average about 30 percent of effective gross income. An overall capitalization rate of 12 percent is derived from market transactions of similar properties. What is the market value? $208,333 $138,542 C. $197,917 d. $145,833 a. b.

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To calculate the market value of the property we will use the income capitalization approach which t... View the full answer