What are income approaches

Income approaches are methods used to determine the value of an asset, typically real estate or a business, based on the income it generates. These approaches consider the potential income that the asset can generate in the future and use this information to calculate its present value. Some common income approaches include the direct capitalization method, discounted cash flow analysis, and the gross income multiplier method. These approaches are often used in conjunction with other valuation methods to determine the overall value of an asset.