Which of the following measures is considered the fundamental determinate of market value for income-producing properties?
A) Net operating income
B) Potential gross income
C) Operating expenses
D) Capital expenditures

Question

Quizplus · Accepted Answer

Net operating income (NOI) is the income left over after deducting operating expenses from the gross income. It is considered the fundamental determinate of market value for income-producing properties because it reflects the property's ability to generate income and covers its operating expenses. Therefore, the higher the NOI, the higher the property's market value is likely to be. Potential gross income, operating expenses, and capital expenditures are important factors in determining the property's overall financial performance, but they are not as significant as the NOI in determining the property's market value.

Which of the Following Measures Is Considered the Fundamental Determinate