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A WA valuer is assessing a commercial property with a stable rental income. Which valuation method is most suitable?

Correct Answer

C) Capitalisation of income method

The capitalisation of income method is most appropriate for commercial properties with stable rental income. It involves capitalising the net income at an appropriate market yield (cap rate) to determine the property's value. The cap rate reflects the risk and return expectations of investors in the WA market.

Answer Options
A
Direct comparison method
B
Summation (cost) method
C
Capitalisation of income method
D
Before and after method

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Related Topics & Key Terms

Key Terms:

capitalisation of incomecap ratecommercial property
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