Property Valuation
The income capitalization approach to appraisal is most appropriate for:
ASingle-family residential properties in suburban Oregon
BVacant land without current income potential
CIncome-producing commercial and investment properties✓ Correct
DHistoric properties being restored
Explanation
The income approach is most applicable to income-producing properties where investors make purchase decisions based on anticipated income — commercial buildings, apartment complexes, office buildings, retail centers, and industrial properties. It converts the property's anticipated income stream into a value indication using capitalization. For single-family homes, the sales comparison approach is typically primary. For vacant land, the sales comparison approach is used.
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