Income Application In Real Estate Assessment

With the development of real estate, real estate appraisal is becoming an important part of the market. The income capitalization approach is the premier, essential method to estimate the net-income real estate. The solution of the parameter selection, and better using the method of income approach, is an urgent and important topic.This article elaborates the concrete connotation of the real estate appraisal and income approach via plenty of national and international relative documents. It reflects the current income approach application from various aspects by using two practical working cases, and concentrating in analyzing two parameters: net operating income and income approach. It shows how to analyzing and calculating the Effective Gross Income and Operating Expenses, as well as to deriving capitalization rate from market extraction and yield capitalization techniques. In the local case, it analyzes mathematical models and modulus of Risk-Adjustment Discount Rate and explicates income approach after adding Risk-Adjustment Discount Rate and it's parameter selection. Through comparing and optimizing various methods of net incomes and capitalization rates, it confirms operating process of real estate appraisal by income approach, makes this method more accurate and scientific.The society is changing, same as real estate. This article analyzes current real estate market, explicates the significance of income approach application, especially for income producing properties, furthermore, perfectly displays the method of income approach in analysis of one huge comprehensive station. In last part, it forecasts some unresolved issues.