Property Management
The capitalization rate used by a Maryland property manager to estimate property value should reflect:
AThe current prime lending rate
BMarket-derived rates from comparable investment property sales in the area✓ Correct
CThe owner's desired return
DMREC's published guidelines
Explanation
Cap rates used in valuation should be derived from actual market transactions of comparable investment properties, reflecting what investors are paying per dollar of income in that market.
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