The approach that typically considers the income generated from a property is known as?

The approach that focuses on the income generated from a property is called the Income Approach. This method is particularly relevant for valuing investment properties, such as apartment buildings or commercial real estate, where the primary purpose is to assess the property's capacity to generate revenue.

The Income Approach calculates value based on the property's earning potential, often involving the capitalization of income. Assessors will estimate the net operating income (NOI) that the property is expected to produce and then apply a capitalization rate to determine its value. This approach aligns closely with how investors evaluate potential investments, emphasizing the relationship between income and value.

In contrast, the Cost Approach focuses on what it would cost to replace a property, the Sales Comparison Approach relies on comparing similar properties that have sold recently, and the Tax Assessment Approach specifically deals with assigning value for tax purposes, which may not necessarily consider the income-generating capability of the property. These distinctions clarify why the Income Approach is the most appropriate answer in this context.