California Real Estate Practice Exam

Question: 1 / 740

Using the gross rent multiplier method, what is the value of a residential property with a four-unit building, each unit renting for $750 per month, and a multiplier of 157?

$471,000

$491,000

The gross rent multiplier method is used to estimate the value of a property based on its rental income. The multiplier is a number that is multiplied by the annual gross rental income to determine the property's value. In this case, the gross rental income for the property is $36,000 ($750 x 4 units x 12 months).

To find the value of the property, we multiply the gross rental income by the multiplier. $36,000 x 157 = $5,652,000. Then, we divide the result by 1000 to get the final value of the property, which is $491,000.

Option A is incorrect because it does not take into account the month-to-month variability of the rental income and assumes a constant annual gross rental income.

Option C is incorrect because it does not include the number of units, which greatly affects the value of

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$450,000

$500,000

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