The Income Approach: An Overview

This course will serve as a review and reinforcement of the principles of Income Capitalization Approach. It is intended for licensed and certified real property appraisers, both residential and non-residential appraisers. It is assumed that participants in this course have completed the required qualifying education courses necessary for licensing or certification, including:

• Basic Appraisal Principles;

• Basic Appraisal Procedures; and

• Residential Sales Comparison and Income Approaches; or

• General Appraiser Income Approach.

We will cover the economic principles and definitions pertinent to valuation of income-producing properties, and properties that are capable of producing income. We will illustrate and utilize income capitalization techniques, including direct capitalization and income multipliers.

We will work on some exercises and examples using the HP 12C financial calculator and it will necessary for the students to use a 12C. Keystroke solutions will be offered. If you do not own an HP 12C, you can download an HP 12C “app” for your smartphone as an alternative. 

Income and expense operating statements will be illustrated for use with commercial properties. We will cover the production of income from potential gross income (PGI) to net operating income (NOI). 

We will also cover the use of the Small Residential Income Property Appraisal Form (SRIPAR, also known as Fannie Mae Form 1025).

Course access is available for 6 months from the day it is opened. All courses, regardless of whether they have been opened, expire two years from the date of purchase. Extensions are available for purchase within 30 days of a course expiring. No extensions will be granted after this period.

Course Roadmap

1. The Income Approach: An Overview

2. Direct Capitalization Methods

3. Income and Expenses

4. Capitalizing Net Operating Income

5. Sales Comparison and Income Approaches

6. Final Exam