Question

The gross multiplier method of appraisal would be of little value when appraising: 

Selections

A. Commercial property

B. Residential property

C. Apartment buildings

D. Public buildings 

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Answer: D

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5 Keys Summary

• The Gross Multiplier Method (also known as the Gross Rent Multiplier, or GRM) is an appraisal technique used primarily for income-producing property by converting expected gross income into an estimated value.

• This method requires knowing the property’s gross rental income, and it applies only to properties that produce rent or income.

• Public buildings, such as city halls, churches, or schools (service buildings), are typically specialized, non-income-producing properties.

• Since public buildings do not generate rental income, the gross multiplier method is irrelevant and thus of little value for their appraisal.

• For appraising service-oriented properties like public buildings, the Cost Approach (Reproduction Cost Approach) is the most appropriate method because finding comparable sales or relying on income is difficult.

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