Property Valuation
The income approach yields the highest value indication when:
AOperating expenses are highest
BA property's income is higher than comparable properties in the market✓ Correct
CVacancy rates are highest
DCap rates are highest
Explanation
Income approach value = NOI / Cap Rate. Higher income relative to comparables (or a lower cap rate reflecting less risk and higher investor demand) produces a higher value indication. Strong income properties in sought-after Utah markets can command premium cap rates.
Related Utah Property Valuation Questions
- An appraiser uses a paired sales analysis in the sales comparison approach primarily to:
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