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CABARRUS COUNTY 2012 APPRAISAL MANUAL Net Operating Income. The result is the present worth estimate of value based on knowledgeable investment criteria. For a more thorough discussion and mathematical explanation of the technique the appraiser should consult one of the more detailed texts such as Dr. Wm N. Kinnard's INCOME PROPERTY VALUATION. GROSS INCOME MULTIPLIER Because of the time and expense required to determine the correct net income for use in the capitalization of income technique, the gross income multiplier has been developed into an effective mass appraisal income tool. Since sales data is required to develop a gross income multiplier, care must be taken to use only qualified sales of COMPARABLE property types. The key to good values using gross income multiplier is the same as any other appraisal technique, good data. Time spent qualifying the sales and determining the details of a commercial transaction is time well spent as the transaction may produce not only a useful income multiplier but also a useful sales comparable and data to derive a useful capitalization rate. To apply a gross income multiplier, assemble the recent qualified, comparable sales and income data to determine the price at which properties comparable to the property being appraised sell and the typical sales price by the typical income, to obtain the gross income multiplier. This multiplier can then be applied to the rent being received or reasonably expected from the subject property to produce an estimate of the property value. MONTHLY GROSS INCOME MULTIPLIER APPLICATION Typical sale price for properties comparable to the subject property $150,000 Typical gross monthly income for properties comparable to the subject parcel $200 Gross Income Multiplier (GIM) 750 (Sale /Income) Subject parcel gross monthly income $225 Estimated Value (GIM x Income) $168,750 Cabarrus County — 2012 Revaluation INCOME PROPERTY VALUATION 8- 13 05/24/01 Attachment number 9 G -6 Page 284