You are retained to appraise multi residential property. The subject is an apartment building containing 40 suites. The rent schedule is summarized in the table below: Type of Number of Suites Suite Bachelor 10 1 Bedroom 2 Bedroom 20 10 Units count PGI Vacancy and collection Operating expenses Monthly Rent $675.00 $775.00 $925.00 Review of the rents revealed that rent charged in this building are $125 below comparable market rents. One of the two-bedroom apartments is occupied by the superintendent/janitor who pays no rent. Typical vacancy rate in the area is 2%, and collection losses on average are 2%. Operating expenses for the subject property are typical to the market. There are three sales of the comparable properties in the area. Details of the sales are summarized in the table below. Comparable 3 Comparable 1 30 $363,000 4.00% Comparable 2 40 $490,000 4.00% 45 $540,000 5.00% $106,000 $140,000 $154,000 Sale Price $3,000,000 $4,200,000 $4,565,000 Calculate the market value of the property using income approach to value. You are expected to use both Effective GIM and capitalization rate methods. 1. Estimate Effective GIM and Overall capitalization Rate from Comparable Sales. 2. Estimate market value of the property using GIM method. 3. Estimate market value of the property using capitalization rate method. 4. Reconcile value indications from both techniques into the final estimate of the market value for the subject property.