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What ever happened to the income approach to value.
invite response
2012 Apr 26, 12:59pm 1,553 views 2 comments
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Tom Stone
2012 Apr 26, 1:30pm
Perhaps because the income approach to valuing single family homes in a particular area does not reflect the reality of that market? And the lenders are asking for market value? And when it comes to the "Cost" approach to value, which one, Replacement cost or reproduction cost? If you are insured for the replacement cost and your 3,000 Sq Ft craftsman burns to the ground you are not going to be happy with what the insurance company considers " A structure of equal utility". It's worthwhile to spend a little time with USPAP "Uniform Standards of Appraisal Practice" and then lurk on a few appraisal boards.
Patrick, I have a question.
If there are three approaches to value used by appraisers, market, cost, income, and the appraiser is suppose to use the most reliable with the most market data, how come they are not using the income approach to value if there are sooooo many rental properties in the neighborhood?