Property Valuation
In South Carolina, what is 'direct capitalization' in the income approach?
ADirectly investing capital into a property
BConverting a single year's stabilized NOI into a value estimate by dividing by the cap rate✓ Correct
CCapitalizing all property expenses directly to value
DA method of directly comparing properties without adjustment
Explanation
Direct capitalization converts a single year's stabilized net operating income into a value estimate by dividing by an overall capitalization rate (Value = NOI / Cap Rate). It is the most common income approach method for stabilized properties.
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