Property Valuation
The income capitalization approach to value is MOST appropriate for:
AOwner-occupied single-family residences
BIncome-producing investment properties✓ Correct
CVacant raw land with no development plans
DNewly constructed custom homes with no comparable sales
Explanation
The income capitalization approach converts expected future income into a present value estimate. It is the primary approach for valuing income-producing properties such as apartment buildings, commercial buildings, and other investment real estate. It is generally not appropriate for owner-occupied homes or vacant land.
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