Property Valuation
The 'band of investment' technique in West Virginia real estate is used to:
AAllocate land value between mineral and surface components
BDerive an overall capitalization rate by weighting the mortgage and equity components based on their respective rates of return✓ Correct
CCompare investment returns across different property types
DDetermine the value of a partial interest in real property
Explanation
The band of investment technique derives the overall capitalization rate by weighting the mortgage component (mortgage constant) and the equity component (equity dividend rate) in proportion to the loan-to-value and equity ratios.
Related West Virginia Property Valuation Questions
- Which type of depreciation in real estate appraisal is caused by factors external to the property, such as a new industrial facility nearby?
- A West Virginia appraisal report states that the opinion of value is '$230,000 +/- $5,000.' Under USPAP, this is:
- In West Virginia appraisal, 'effective age' is defined as:
- In West Virginia, a property appraised for a federally related transaction must be appraised by:
- What is the principle of substitution as applied in real estate valuation?
- In West Virginia, which type of value is used when a property must be sold quickly in a forced sale?
- A West Virginia appraiser is asked by their client to 'hit a number' and provide a value that meets the client's purchase price. Complying with this request would:
- When a West Virginia appraiser adjusts a comparable sale for a difference in square footage, the appraiser applies:
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