When developing gross income multipliers (GIM), what should the appraiser compute for each property stratum?

Determining the gross income multiplier (GIM) involves calculating the central tendency and dispersion for each property stratum. Central tendency refers to the average income a property generates, which is crucial for determining its value in relation to its income-producing capacity. This average helps appraisers form a basis for comparison among properties within the same category or class.

Dispersion, on the other hand, measures the variability of the gross income figures across the properties in that stratum. This is important because it provides insight into the range of income potential and helps appraisers understand the diversity of income levels within the group. By analyzing both central tendency and dispersion, appraisers can arrive at a more accurate and representative GIM that reflects the realities of the market conditions for that specific category of properties.

Both concepts are essential for deriving a reliable GIM that can subsequently be used to estimate property values based on expected revenue. The interplay of central tendency and dispersion gives a clearer picture of market dynamics and aids in making informed valuation decisions.