Virginia State Real Estate Exam Practice Question
When valuing property using the income approach, the factor that is MOST important is:
Correct Answer: B
Rationale: In the income approach to property valuation, the capitalization rate is crucial as it reflects the expected return on investment, directly influencing property value based on income generation.
Option A, the date of sale, is less relevant since it does not impact the ongoing income potential of the property. Option C, the size of the lot, may affect land value but does not directly correlate with income generation. Option D, the square footage of the building, is important for assessing rental potential but is secondary to the capitalization rate, which encapsulates the overall investment return.
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