In which scenarios is the income approach most commonly used?

The income approach is primarily used when appraising commercial or investment properties that generate income, as it focuses on the potential revenues that the property can produce. This method is particularly relevant for properties such as apartment buildings, office spaces, and retail centers where the income generated through rent or leases is a significant factor in determining value. By analyzing these income streams, appraisers can estimate the present value of future cash flows, making it an effective and practical valuation technique for investors and stakeholders looking to understand the financial viability of a property.

In contrast, the other scenarios provided do not typically involve the income approach. For residential properties, the market approach is often more appropriate, as it relies on comparable sales data. Land for development typically involves assessing the land's potential based on its size, location, and market demand, rather than the income it generates. Similarly, personal properties like vehicles or equipment usually require cost or market approaches for valuation, focusing on replacement costs or comparable sales rather than income potential.