Recapture rate in appraisal describes the rate at which an investment is recovered in a wasting asset. It is added to the discount rate to derive the capitalization rate. This rate can be calculated using methods such as straight-line, sinking fund, or annuity.
The Straight-Line Recapture Rate is a component of the capitalization rate that accounts for the annual loss in value of a wasting asset by assuming equal depreciation each year over the asset's useful life.
A wasting asset is a property, resource, or investment that diminishes in value over time due to inherent factors like physical deterioration, depletion, or obsolescence.
