Income Approach — GRM & Cap Rate

National · Valuation & Appraisal — free cheat sheet for the real estate licensing exam.

📐 Valuation & Appraisal

📋 The 1-minute cheat sheet

Cap rate: Value = NOI ÷ rate (IRV: Income = Rate × Value)
NOI = effective gross income − operating expenses (NOT debt service or depreciation)
Higher cap rate = riskier property = LOWER value for the same income
GRM (quick check): price ÷ monthly rent; Value = rent × GRM
Use for: apartments, offices, anything bought for its income stream

Is Income Approach — GRM & Cap Rate on the real estate exam?

Yes. Valuation & Appraisal is a scored domain on the real estate licensing exam, and this topic appears in the national portion.

Is this cheat sheet free?

Yes — every page on CinnaPrep's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.