What Is Residual Cap Rate?
Residual cap rate is the capitalization rate applied to the income remaining for one specific component or interest in a property — such as the land or a subordinate ownership interest — after other components have been assigned their own return, as used in the band-of-investment and land-and-building residual valuation techniques.
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This definition is provided for general educational purposes and is not financial, legal, tax, or real estate advice. Verify important decisions with appropriately qualified professionals.
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