In April 2026, broker Lena Ortiz is pricing a four-unit property on Maple Avenue in a neighborhood with an active rental market. Why is the income approach especially relevant to her analysis?
Correct Answer
B) Because buyers of small income property focus on the rent the property can produce
The income approach is especially relevant because a four-unit property is commonly bought for its earning power. In an active rental market, buyers and appraisers pay close attention to market rent, operating performance, and the relationship between income and value.
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More Valuation Market Analysis Questions
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- → An appraiser is using the income approach to value a 12-unit rental building in Brooklyn. The building generates $180,000 in annual gross rental income. Operating expenses total $54,000 annually. The appraiser determines that a 7.5% capitalization rate is appropriate for this type of property in this location. What is the indicated value using the income approach?
- → An example of functional obsolescence is:
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- → Who typically hires the appraiser in a real estate transaction?
- → A depth table is used to estimate property value for:
- → Under federal law, which type of loan typically does NOT require a property appraisal?
- → FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act) requires:
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What best describes the income approach to value?
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In May 2026, appraiser Devon Price analyzes a comparable three-unit property that sold for $750,000. Market rent data show each unit should rent for $3,000 per month. Rounded to two decimals, what gross rent multiplier does the sale indicate?