Property Valuation
In the income approach, the 'overall capitalization rate' (OAR) differs from a 'mortgage capitalization rate' in that the OAR:
AConsiders only debt service
BApplies to the total property value (debt + equity), not just the mortgage component✓ Correct
CIs used only for residential properties
DIs always lower than the mortgage rate
Explanation
The overall (or overall) capitalization rate applies to the total property value (both debt and equity components), while mortgage rates apply only to the financed portion.
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