Question

A rental home has monthly gross income of $1,100. A suitable gross income multiplier derived from market data is 14.7. What estimated sale price (to the nearest $1,000) is indicated?

Answer 1

Answer:

$212,000 round off

Explanation:

We know that

Gross income multiplier = Estimated Sale price ÷ Gross income

where,

Gross income multiplier = 14.7

And, the annual gross income would be

= Monthly gross income × total number of months in a year

= $1,100 × 12 months

= $14,400

So, the estimated sale price would be

14.7 = Estimated Sale price ÷  $14,400

So, the Estimated Sale price would be

= $14,400 × 14.7

= $211,680

= $212,000 round off