Property Valuation
A Louisiana appraiser developing a capitalization rate from market data should use sales of:
AAny recently sold properties in the area
BIncome-producing properties similar in type, location, age, and quality to the subject property — with reliable income and expense data✓ Correct
COnly distressed or foreclosure sales
DProperties assessed by the same parish assessor
Explanation
Cap rates derived from market data must come from comparable income properties — similar type, location, quality, and risk profile. Using dissimilar properties would produce misleading cap rates and unreliable value conclusions.
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