Band of Investment Technique


Within the Income Approach of many appraisal reports is a "Band of Investment" analysis.  This approach considers both the rate appropriate for the debt element of a property and the rate appropriate for the equity element.  Each rate is derived from market information and the two rates are mathematically joined to provde a capitalization rate.


Since this method of deriving a capitalization rate does not consider the rates established via similar property sales in the market, it has signficant drawbacks.  Generally the analysis is used as a secondary method that "checks" what is discovered via direct capitalization.       


Contact us with your questions or concerns regarding the band of investent technique or regarding your specific appraisal assignment in Nevada at 1-702-568-6699.  We can also be e-mailed at   



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Commercial Real Estate Appraisals in the Las Vegas & Henderson, Nevada Area.