Posted by LK on April 09, 2007 at 13:22:58:
The property should definitely be valued on income. The cost/unit is more of a rule which originates from income of the property.
Ray Alcorn teaches determining the value using the income approach, replacement cost, and comparable sales all combined to form the big picture based on your investment criteria.
The income approach usually carries the most weight but all of them are only as good as the information used in determining the value.
This is the link to an article by Ray Alcorn on deriving cap rates, http://www.creonline.com/articles/art-216.html
It seems like there was also a real good post by Ray on using the three methods to determe value but I could not find it with a quick search.