Property Valuation
The income capitalization approach to value assumes that value is:
AEqual to the original cost of construction
BCreated by the income stream the property produces✓ Correct
CDetermined solely by comparable sales
DFixed at the assessed value for tax purposes
Explanation
The income approach converts expected future income into an estimate of present value. Value = NOI ÷ Cap Rate. It is most appropriate for income-producing properties.
Related Georgia Property Valuation Questions
- The 'band of investment' technique in the income approach estimates a cap rate by:
- 'Value in use' differs from 'market value' in that value in use is:
- An 'as improved' appraisal values the property:
- A 'drive-by' appraisal (exterior-only inspection) is:
- The 'principle of regression' in real estate valuation holds that:
- USPAP requires appraisers to retain their workfiles for a minimum of:
- In an appraisal, 'functional obsolescence' refers to:
- The 'extra' value created by a corner lot compared to interior lots is called:
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