Property Valuation
In the income approach, what does a lower capitalization rate indicate about a Delaware investment property?
AHigher risk and lower value
BLower risk and higher value✓ Correct
CHigher risk and higher value
DLower risk and lower value
Explanation
Cap rates and value move inversely. A lower cap rate reflects lower perceived risk (e.g., prime location, stable tenants), which corresponds to a higher property value for the same level of income.
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