When valuing a property using the income approach, what is typically used as evidence of market rent?

• A. Appraiser’s opinion
• B. Historical rents only
• C. Market rent data from similar properties
• D. Replacement cost data

Answer: (C)

In the income approach, the rent used to convert expected income into value should reflect current market conditions. The best evidence of what the market would actually pay is market rent data from similar properties. This data shows what tenants are currently being charged for comparable spaces, accounting for location, size, features, and condition, and it aligns the income estimate with real market pricing.

Historical rents aren’t ideal because they may not reflect present demand or pricing trends. An appraiser’s opinion lacks the observable market evidence you’d get from comparable properties. Replacement cost data belongs to the cost approach, not the income approach, which focuses on income-producing potential rather than construction costs.