Property Valuation
An Ohio commercial property appraiser uses a discounted cash flow (DCF) analysis. This method involves:
ADividing the property's current NOI by the cap rate
BProjecting future income streams and discounting them to present value using a required rate of return✓ Correct
CMultiplying monthly rent by a gross rent multiplier
DAdding replacement cost to land value
Explanation
DCF analysis projects future income (and reversion) for a holding period and discounts them back to present value at an appropriate discount rate, producing an indication of value.
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