Income approach vs comp approach for a sale price and buy price

[Joseph Ruiz]

Hello bigger pocket family. I am needing some advice and a good rule of thumb for Appraised values. On a duplex rental property. Comp approach vs Income approach. How close in relation are these numbers? I have a discrepancy of a $100k on a appraisal. Happy Halloween and thanks in advance.

[Bill B.]

I’ve never seen the income approach applied to a property with less than 5 units except to calculate the income to help you qualify for a loan…

Imagine a $100k home that brings in 20k in STR income per year. At a 5 cap that house is worth $400k. But there ain't nobody going to pay you $400k for it. BUT, the bank will allow between $15k and $20k of that income towards your income to qualify for a loan, depending ho womanly years you've been a landlord.