Property Valuation
A 'recapture rate' in the income approach accounts for:
AA. The investor's return on equity investment
BB. The return of the investment (capital recovery) over the useful life of the improvement✓ Correct
CC. Changes in the capitalization rate over time
DD. Income lost during vacancies
Explanation
The recapture rate (capital recovery rate) in the income approach represents the rate at which the investor recovers the depreciating investment in the building over its economic life. It is part of the overall capitalization rate.
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