income capitalization approach

income capitalization approach

See income approach.

References in periodicals archive ?
The state supreme court noted that all three expert appraisers and the trial court used the income capitalization approach and the comparable sales approach to value the subject property.
The income capitalization approach estimates the value of an intangible asset or the property rights on the asset, by calculation of discounted value of anticipated benefits [8, p.82].
Many investment properties are valued on the income capitalization approach, or CAP rate.
The market data approach is generally more reliable for residential properties whereas investment properties analysts and appraisers should rely more extensively on the income capitalization approach. The income capitalization approach depends on reliable and detailed information on the income and the expenses for a particular piece of property.
The income capitalization approach is a set of procedures through which an appraiser derives a value indication for an income-producing property, by converting its anticipated benefits (cash flows and reversion) into property value.
Part 1 offers elementary instruction in the income capitalization approach to value, and builds the foundation for further study of analytical and discounting methods and procedures in Parts 2 and 3.
"This simple technique for estimating overall capitalization rates is preferred and will produce a reliable indication of value by the income capitalization approach if three conditions are met.
Notestine's appraiser conducted the appraisal using an income capitalization approach based on the actual restricted rents, and actual and market comparable expenses.
For example, when valuing an income producing property, many appraisers will deducted local property taxes as an expense item to determine the net rent to be capitalized when using the income capitalization approach to value.
* The income capitalization approach focuses on the cash flow of the property.
They also both agreed that there was a lack of comparable sales data so the income capitalization approach was not appropriate.
The income capitalization approach estimates market value based upon the future cash flows expected to be generated from the property.