California Real Estate Practice Exam

The gross rent multiplier approach is a useful income approach in appraising which of the following?

1. Single-family homes

2. Commercial office spaces

3. Industrial complexes

4. Retail malls

The correct answer is: Single-family homes

The gross rent multiplier approach is a method used in real estate appraisal to determine the potential value of income-producing properties. It is commonly used for single-family homes as they typically generate consistent rental income. The other options, such as commercial office spaces, industrial complexes, and retail malls, may have more varied income streams and expenses, making the gross rent multiplier approach less accurate for these types of properties. Therefore, the most appropriate application of this approach would be for single-family homes.