Property Valuation
What is the income approach to value, and which property type is it most commonly applied to in Nevada?
AComparing sales; single-family homes
BEstimating the present value of future income streams; income-producing properties such as apartment complexes and commercial buildings✓ Correct
CAdding land and depreciated improvement costs; new construction
DSubtracting debt from equity; vacant land
Explanation
The income approach estimates value by capitalizing net operating income (NOI) at an appropriate cap rate, or by discounting future cash flows. It is primarily used for income-producing properties such as apartment buildings, office, retail, and industrial properties.
Related Nevada Property Valuation Questions
- In Nevada, which principle of value states that the value of a property is affected by the values of surrounding properties?
- In Nevada, the cost approach to appraisal involves which calculation?
- What is the land residual technique in Nevada commercial appraisal?
- What is a retrospective appraisal versus a prospective appraisal in Nevada?
- An appraisal adjustment of -$5,000 for a comparable sale means the comparable property:
- The cost approach to value is most useful for appraising:
- Depreciation in the cost approach to appraisal is defined as:
- What does 'arm's length transaction' mean in Nevada real estate appraisal?
Practice More Nevada Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Nevada Quiz →