Finance
In New York, a 'split-rate appraisal' (or land residual technique) is used to:
ADivide the mortgage amount between two lenders
BDetermine the value of land separately from the improvements by capitalizing the income attributable to the land at a different rate than income attributable to the improvements✓ Correct
CAllocate the purchase price between real and personal property
DDivide the appraisal report into two separate analyses
Explanation
The land residual technique (used in New York commercial appraisal) applies different capitalization rates to the land component and the improvement component of a property's income, recognizing that land and improvements carry different risk profiles and useful lives. It is used when the value of improvements is known but land value must be determined.
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