IAAO 102 Exam Questions and Correct Answers Latest Update Already Passed
Anticipation - Answers Value is created by the expectation of benefits to be derived in the future
Substitution - Answers the prices, rents, and rates of return of property tend to be set by the current prices, rents and r...
Anticipation - Answers Value is created by the expectation of benefits to be derived in the future
Substitution - Answers the prices, rents, and rates of return of property tend to be set by the current
prices, rents and rates of return for equally desire able substitute properties.
Contribution - Answers the value of a component of real estate can be measured by the amount it
contributes to net operating income because net operating income can be capitalized into value.
Market Value - Answers means the most probable price which a property should bring in a competitive
and open market under all conditions.
5 Analysis Questions for Investors - - Answers 1. How much it cost?
2. How much will I get back?
3. When will I get it back?
4. What are the risk?
5. What are some comps ROI compared to my interested property?
Leverage - Answers borrowing of funds in hopes of earning a greater return than the cost of the
borrowed funds. This amount can be be negative, positive, or neutral.
Mortgage - Answers most common type of financing for real estate.
Junior Mortgage - Answers typical a second mortgage
Chattel Mortgage - Answers a mortgage only on personal property.
Amortized Mortgage - Answers Fixed rate mortgage permanent loan in which the sum of the principal
and interest payments remains fixed throughout the term of the loan.
Four factors to capture overall yield rate (Yô) - - Answers 1. Safe rate
2. Risk Rate
3. Rate for non-liquidity
4. Rate for Management
Recapture Rate - Answers Provides for the return of the investment in the wasting portion of the assets.
Effective Tax Rate (ETR) - Answers Reflect the relationship between the real estate taxes and the value
of the property.
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