Estimate the Cap Rate using the BAND OF INVESTMENT Method in order to estimate the value of a Rental Property using a Loan to Value Ratio of 75% for a 25 years Mortgage at fixed annual rate of 6%. The investor’s required return on equity is 13%. According to your calculations, What is the required Cap Rate ?

Answer rating: 100% (QA)

To estimate the required Cap Rate using the Band of Investment method we need to consider ... View the full answer