Property Valuation
The income approach to value estimates property value based on:
AThe cost to replace the improvements plus land value
BThe present value of the future income stream the property is expected to generate✓ Correct
CRecent sales prices of similar properties in the area
DThe assessed value assigned by the county tax assessor
Explanation
The income approach capitalizes the net operating income (NOI) to determine value. It is most appropriate for income-producing properties like apartment buildings and commercial real estate.
Related Arkansas Property Valuation Questions
- Reconciliation in the appraisal process refers to:
- The cost approach to value is MOST appropriate for appraising:
- If a home in a neighborhood of $200,000 houses is improved with a $100,000 addition, its value will likely:
- When a comparable sale was a foreclosure or distressed sale, the appraiser should:
- External (economic) obsolescence differs from other forms of depreciation because it is:
- A comparable property sold for $250,000 but has a garage worth $10,000 that the subject property lacks. The adjusted value of the comparable for comparison to the subject is:
- Which appraisal approach estimates value by analyzing recent sales of comparable properties?
- Contract rent below market rent creates:
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