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).
