What type of properties does the Income Approach typically assess?

The Income Approach is primarily designed to evaluate properties that generate income, such as rental properties, commercial buildings, and multifamily units. This method focuses on understanding the potential cash flow that a property can produce over time, which directly correlates to its value.

Income-producing properties are valued based on their ability to generate revenue, often calculated through techniques such as capitalization rates or discounted cash flow analysis. By examining factors like gross income, operating expenses, and market rents, this approach provides a quantifiable measure of a property's financial performance.

Other property types listed, such as vacant land, commercial and retail properties, and single-family homes, may not inherently produce income in the same way that defined income-producing properties do. While some commercial and retail properties could fall into the category of income-producing properties, the key distinction lies in the definition of what constitutes income-producing versus the broader category of commercial or retail properties.