Question

In analyzing gross income of a property, the characteristic of the income that the appraiser is concerned with is _________.

Answer 1

In analyzing gross income, the appraiser is concerned with the quality, quantity, and durability of the property's income.

The real estate appraisal method known as the income (capitalization) approach estimates a property's value based on the income it generates.

It can vary in:

• quality (is it a monthly rent paid by tenants or an increase in the property's market value?);
• quantity;
• durability (the property's income may fluctuate if the neighborhood is experiencing changes or if it is only leased occasionally, for example).