Property Valuation
In Virginia, the 'Band of Investment' technique is used in the income approach to:
AEstimate the value of residential properties
BDerive an overall capitalization rate based on the returns required by both mortgage lenders and equity investors✓ Correct
CCalculate the gross rent multiplier
DAdjust for functional obsolescence
Explanation
The Band of Investment technique calculates an overall cap rate by weighting the mortgage component (lender's rate) and the equity component (investor's required return) based on their proportionate contributions to the purchase price.
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