Estimating The Market Value of Real Estate Using the Income Approach in Conditions of Military Threat

Estimating the market value of real estate is a process that forms the basis for assessing the value of a property intended for sale, primarily for sale purposes. This difficult task is undertaken by real estate appraisers, who, based on strict regulations, make forecasts and issue a verdict on the property’s value. This forecast is subject to negotiation and dispute between the parties. In most cases, valuations are performed using a comparative approach, employing the paired comparison method, which is relatively simple and poses few challenges, provided there is a database of actual transactions involving comparable properties. Estimating the market value of real estate using the income approach is the least discussed. The literature on the subject tends to avoid this issue, and there are no examples that can be used in the real estate appraiser’s practice. With this in mind, this study aims to present a methodology for estimating the market value of residential properties using the income approach, assuming that residential properties generate or have the potential to generate income for their owners, at least in the form of rent. In this study, the application of the income approach is presented in an innovative methodology, assuming a state of military threat related to the war in Ukraine.