For the income approach to appraisal, value is best described as what?

In the income approach to appraisal, value is assessed based on the income-generating potential of a property. This method is particularly relevant for investment properties, where the primary focus is on the cash flow that the property can produce over time.

Describing value as "the worth of the investment" aligns perfectly with this approach because it underscores the importance of the net operating income (NOI) that a property generates. This NOI, often capitalized to estimate the property's value, reflects the future income that an investor can expect, thus directly correlating the property’s value to its ability to generate revenue.

In contrast to the notion of the original purchase price, which may not reflect current market conditions or potential for income generation, the income approach focuses on the property's current financial performance. Market demand influences what an investor might be willing to pay, but the most accurate representation of value in the income approach pertains specifically to the investment's worth. Lastly, estimating repair costs pertains to the condition of a property rather than its income-generating capacity, which is not the primary concern of the income approach.