An equity dividend rate, also known as cash-on-cash, is the annual rate investors expect to receive on their equity investment. For example, suppose I invest $10,000 and expect to receive $1,500 annually from an investment. The equity dividend rate may be calculated as: $1,500/$10,000 = .15 or 15%. There are a few different methods to estimate what … [Read more...]
Band of Investments Method
What is the Band of Investments Method? The phrase "Band of Investments" refers to a method used by commercial appraisers or investors to calculate a rate known as an overall capitalization rate. This rate is then used to convert the net income produced by a property into an indication of value. Here is a brief explanation of how it … [Read more...]
Supporting an Equity Dividend Rate
Support in a Commercial Appraisal Try as you might. You will never reduce the process of appraising real estate to a science. But you can provide more support for your reasoning in a commercial appraisal report. For example, I was recently asked to provide additional support for an equity dividend rate in an appraisal report of a large … [Read more...]
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