The income approach to property valuation is a useful tool for investors to evaluate income producing real estate we will discuss the three major. If a propertys use is to be to generate income from rents or leases the income method of appraisal or valuation is most commonly used the net income generated by the property is used in conjunction with certain factors to calculate its value on the current market if sold. The cost approach looks at what it would cost to replace a building while the sales comparable approach looks at what similar properties sell for and adjusting the market data to come up with an accurate value for the property the income approach applies a multiplier called a capitalization rate to its income this approach is usually most
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