California Real Estate Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Master the California Real Estate Exam with our comprehensive practice quiz. Get expert tips, detailed content review, and insider strategies to pass on your first try.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

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
$450,000
$500,000

The correct answer is: $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