Assessment Journal


Assessment records, Income approach to value


This article argues that the best way to understand the components of net operating income is from the perspective of a property manager. Each step in determining net operating income is defined and illustrated with concrete examples. The most effective management produces the greatest net operating income in the long run. All of the decisions of property management as related to the elements of income and expenses are interconnected and affect each other. The author states that an appraiser who understands this will be in a better position to estimate the appropriate value using the income approach.