Last reviewed 08-20-2026Short-Sale.com Editorialglossary
INCOME (CAPITALIZATION) APPROACH
California Department of Real Estate
Updated 08-20-2026
INCOME (CAPITALIZATION) APPROACH
One of the three methods of the appraisal process generally applied to income producing property, and involves a three-step process— (1) find net annual income, (2) set an appropriate capitalization rate or “present worth” factor, and (3) capitalize the income dividing the net income by the capitalization rate.
California Department of Real Estate Glossary
California Department of Real Estate · p. 18
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