Property Valuation
In New York, the 'band of investment' technique is used in the income approach to:
ACalculate gross potential income
BDerive a capitalization rate based on the weighted average return requirements of the mortgage and equity components✓ Correct
CDetermine the loan-to-value ratio
DEstimate physical depreciation
Explanation
The band of investment technique develops a capitalization rate by calculating the weighted average cost of capital from both the mortgage (debt) and equity components of the investment, reflecting the return requirements of each.
Related New York Property Valuation Questions
- In New York, a 'drive-by' appraisal or 'exterior-only' appraisal is:
- A New York appraiser adjusting a comparable sale for a feature the comparable has but the subject property lacks would make a:
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