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Income (Investment) Method

If a property is used to generate income from sales, rents or leases, the most common method of of appraisal or valuation is the income method. The net income generated by the property is used to calculate the value of the property on the current market. This is done conjunction with assessing the condition of the property for possible future repair or renovation expenses. The income approach can use one or more of the following methods of evaluation:

  • capitalisation rates
  • revenue multipliers
  • discounted cash flows
  • Related Topics:

  • profit (accounts) method
  • development (residual) method
  • comparable method
  • contractor's (cost) method