Kobi, an appraiser, is appraising a single-family home used for a rental. If he wants to use the income approach, he will likely use ______.

The income approach to appraisal is primarily concerned with valuing a property based on the income it generates, particularly for investment properties like rental homes. When appraisers apply this method, they often utilize a tool called the Gross Rent Multiplier (GRM).

The GRM is a ratio that compares the property's price to its gross rental income, making it an effective measure for estimating the value of income-producing properties. By analyzing the GRM, appraisers can quickly assess potential value based on rental income without delving deeply into expenses, making it especially useful for single-family rentals.

In contrast, the capitalization rate (cap rate) is commonly applied in more complex income analysis where expenses and net operating income are fully considered. Replacement value pertains to the cost of replacing a property, which is unrelated to income generation, while value in situ refers to the value of a property in its current use, which does not specifically align with the income-producing focus of the question. Thus, the use of GRM is the most aligned and practical choice for Kobi in appraising a rental property using the income approach.