The Issue And Solution Of Income Approach In Assessment Practice

With the increasingly rapid development of real estate market, as a new rising industry, the assessment of real estate appears in the life of dwellers and it has connected with it closely. The income approach is the assessment approach of real estate that the expected return of real estate estimated exactly by the principle of perspective return, and its value is computed by the scientific income and the rate of capitalization.This article bases on the information collecting and market investigation and claims that the appraisal result of income approach is large different from the real value of real estate. In order to demonstrate this assumption, this article also assesses it scientifically by several different ways and is widely used collection of abundant information and then the result shows that this problem exists in it. In view of this problem, this article starts from the principal of income approach and the result is that the future return which the manifestation is rent comes up to the requirements and exists in the field of residential real estate. Commenting on rent, takes Urumqi as an example, the future return of residential real estate is determined by the rent whether it is high or not.After an objective and all-around investigation and research of the market about rent and sale of residential real estate in Urumqi, the rate is1:440, which is far below the international rate(1:300—1:200), the abnormal rate makes us impossible to estimate the future return. At the same time, when speaking of the capitalization rate and the view of evaluation about income approach, the scientific capitalization rate computed by quantitative guidelines has a degree of elasticity and great technical difficulties, and the view of assessment is another factor influencing the result of assessment.Finally, it is a real important factor that the appraiser has much discretionary subjectivity and is not rational, but the income approach needs high-quality and professional appraiser, which is determined by the characteristic of income approach. Be aimed at this one problem that exists in the assessment field of residential real estate, this article makes recommendations on the rate of rent and sale in Urumqi, parameter selection and the subjective action of dwellers. In addition, in a new view of assessment, the approach of resale value forecasts the value of residential real estate in this article.