Introduction to the Income Capitalization Approach

402 – Introduction to the Income Capitalization Approach: An introduction to the direct/income capitalization approach to appraisal, and how to apply the approach in a variety of situations, through a combination of presentation, discussion, examples, exercises and case studies.

Course Number:


Course Title:

Introduction to the Income Capitalization Approach

Course Level:


Course Length:

1 day – 8 AM to 5 PM

IRWA Credits:


AQB Credits:

The Appraiser Qualifications Board (AQB) has reviewed and approved this course for the following: 7 hours CE through 05/01/2025. Approval # 56226


Not applicable



Course Description

This course introduces the income capitalization approach, which is a method of evaluating an investment by estimating future cash flows and taking into consideration the time value of money. This approach is presented in a concise, easy-to-understand format, and combines lecture, case studies and exercises to teach participants how to apply income capitalization in a variety of situations. 
  • Specialist: A beginning level elective course that can be applied towards the R/W-AC certification.
  • The relationship between the Valuation Process and the Income Capitalization Approach
  • The applicability and reliability of the approach
  • The characteristics of Direct and Yield Capitalization
  • The components of Direct Capitalization (determining gross income, estimating vacancy and credit loss, calculating effective gross income, estimating expense and estimating value)
  • Capitalization Rate Development
  • Determining Just Compensation

Course Tuition includes

  • Participant Manual
Required Material
  • Financial calculator 

Who should take this course

This course is designed for right of way professionals who are in the appraisal field.
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