Property Valuation
The income approach to value is MOST appropriate for:
ASingle-family owner-occupied homes
BIncome-producing investment properties✓ Correct
CRaw vacant land
DSpecial-purpose properties like churches
Explanation
The income approach (capitalization of income) is most appropriate for income-producing properties like apartment buildings and commercial real estate, where investors make decisions based on expected income streams.
Related California Property Valuation Questions
- An appraiser values a property using the sales comparison approach and finds that a comparable property has a swimming pool worth $15,000 but the subject property does not. What adjustment does the appraiser make?
- A property generates an NOI of $60,000. Comparable properties sell at a 5% cap rate. What is the indicated value using the income approach?
- The principle of progression in real estate means:
- What is 'over-improvement' and how does it affect property value?
- Gross Rent Multiplier (GRM) is calculated as:
- The effective age of a building refers to:
- In a 'buyer's market,' real estate prices tend to:
- The principle of substitution states that:
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