What does the Capitalization of Rent Loss Method primarily focus on?

The Capitalization of Rent Loss Method focuses on quantifying the potential income lost due to a property’s inability to generate rental income at its full potential. This method involves assessing the projected or actual rent loss and capitalizing it to determine its present value.

Finding the level of depreciation through comparables is related to evaluating the property’s value based on similar properties and their conditions. However, in this context, the Capitalization of Rent Loss specifically aims to measure the financial impact of lost rental income rather than estimating depreciation based on comparables.

In contrast, while market trends and costs of maintaining the property may be relevant to overall property valuation, they do not directly address the specific mechanism of capitalizing lost rent. Likewise, comparing sales of similar buildings relates more to market value appraisals rather than the ability to assess rent loss.