Property Valuation
The income capitalization approach to value is most appropriate when appraising:
AA single-family owner-occupied home in Des Moines
BAn income-producing apartment building or commercial property✓ Correct
CVacant agricultural land with no leases
DA newly constructed church
Explanation
The income capitalization approach converts the property's net operating income into an estimate of value using a capitalization rate (NOI / Cap Rate = Value). It is most applicable to income-producing investment properties.
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