Question

A two-unit apartment building is being appraised. In this neighborhood, the accepted gross rent multiplier is 144. The annual income on the building is $16,800 (both units rented). The monthly expenses are $300. Based on the income approach, what is the estimated market value of the apartment building?

Answer 1

Answer:201,600

Step-by-step explanation:

GRM = sales price ÷ gross rent: (X / 1400 = 144)

monthly rent is (16,800 / 12) = 1400

1400 x 144 = 201,600

Answer 2

The estimated market value of the apartment building is 2,419,200

Step-by-step explanation:

The gross rent multiplier is the relationship between the rent income before expenses and the real state value

`(Real-State)/(rent) =GRM`

We plug the values into the formula and got:

`(Real-State)/(16,800) =144`

144 x 16,800 = 2,419,200