Agenda - 09-02-2008 - 4e - Laserfiche WebLink

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comparable properties will establish a range in value in which the value of the subject property will fall. Further analysis of the facts should enable the appraiser to narrow the range down to the value level which is most applicable to the subject property, with the proper market factor applied. 3 . INCOME APPROACH The Income Approach is of course, limited in its application to those properties which are best used for the production of income. In the mass appraisal process, all available economic data are recognized as they pertain to income producing properties found in the County. Then these data are reduced to units of comparison in like manner as in the Cost and Market Data Approaches. Therefore, while individual considerations of income data will be given when necessary, mass consideration of income producing factors and the capitalization process in general are reflected in the schedules of values as adopted. Whenever the necessity for individual, specific attention of the Income Approach becomes apparent in the appraisal of a particular property; the following general guidelines are recommended: (1) Income to be capitalized shall be that which is considered to represent the potential earning capacity of the property being appraised. This income estimate will often be stated in terms of net rental before taxes and recapture, but may also be considered in other terms such as gross rental, etc. (2) Capitalization of income may be accomplished by any accepted method or technique which results in a value indication in compliance with the requirement of the "Uniform Appraisal Standard" (N.C. G.S. 105-283) . Examples of capitalization methods and techniques include: Straight Capitalization Annuity Capitalization, Sinking Fund Method, Residual Techniques, etc. (3) Capitalization rates may be expressed as overall rates, built-up rates, factors, etc. Such rates are limited in their use however, by their practical application in the Income Approach to generate value indications as are required by statute.