An investor is interested in purchasing a multi-family dwelling. He would most likely want to look for a property where rents are similar to comps in the area.

• A. Property where the rents are similar to comparable properties in the same area
• B. Property with the highest current rents in the market
• C. Property in a different city with strong growth
• D. Property with unusual amenities that command a premium

Answer: (A)

The main idea here is aligning the property's income with prevailing market rents using comps. When evaluating a multi-family, you want rents to be in line with what similar properties in the same area are charging. This makes the expected net operating income and overall valuation realistic, and it reduces occupancy risk because the units are priced at a level tenants in the market will accept. If rents are substantially higher than comps, vacancies and turnover can rise; if they’re significantly lower, you’re leaving money on the table and the deal may not reflect true market value. Properties priced or performing in line with comparable properties provide a stable, defensible basis for underwriting, financing, and comparing with other investment opportunities.