Property Valuation
The income approach to value is most appropriate for which type of property?
AOwner-occupied single-family residences
BIncome-producing investment properties such as apartment buildings and commercial properties✓ Correct
CVacant agricultural land
DSpecial-purpose properties like schools
Explanation
The income approach is most applicable to income-producing properties where investors base purchase decisions primarily on the property's ability to generate income. It is less reliable for owner-occupied residences where buyers are not motivated primarily by investment return.
Related California Property Valuation Questions
- Functional obsolescence refers to:
- The income approach to value is most appropriate for:
- The principle of substitution states that:
- The 'highest and best use' of a property is defined as the use that is:
- In the sales comparison approach, the appraiser makes adjustments to the comparable sales to account for differences from the subject property. If a comparable has a feature the subject lacks, the adjustment is:
- What is 'functional obsolescence' as used in real estate appraisal?
- The cost approach to value is best suited for:
- What is 'comparables' (comps) in real estate?
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