The adds up the money earned by producers plus taxes paid to the government.

The income approach adds up the money earned by producers plus taxes paid to the government.

The income approach is understood as a type of real estate appraisal method by which investors are able to estimate the value of a property by taking the net operating income of the rent collected and dividing it by the capitalization rate.

Income approach is generally used for income-producing properties and is one of three popular approaches to appraising real estate.