The income approach in the real-estate appraisal

The article deals with the peculiarities of application of the income approach in the real estate evaluation. The significance of identifying and analyzing the risks associated with the yield of estimated object is emphasized. The author considers two basic methods of the approach: income capitalization and discounted cash flows. Selection between the two presented methods is proposed to undertake depending on the expected income flow. The author believes that the main disadvantage of the income method of real estate appraisal is the difficulty of forecasting of future results and costs.