Property Valuation
When appraising income-producing property such as an Arizona apartment complex, an appraiser would primarily use the:
ASales comparison approach
BCost approach
CIncome (capitalization) approach✓ Correct
DAssessed value approach
Explanation
The income approach is most appropriate for income-producing properties because it values the property based on the net operating income it generates, capitalized at the appropriate rate (Cap Rate = NOI / Value).
Related Arizona Property Valuation Questions
- A leasehold interest in Arizona has value when:
- An Arizona appraiser finds a comparable sale has one extra bathroom compared to the subject property. The appraiser would:
- An Arizona residential appraiser uses the sales comparison approach and finds the subject property has a pool that no comparable sale has. The appraiser should:
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- A commercial property's 'potential gross income' (PGI) represents:
- An Arizona property produces a Net Operating Income (NOI) of $120,000 per year. Using a capitalization rate of 6%, what is the estimated value?
- In the income approach to value, the capitalization rate is calculated as:
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