Which method is Vlad likely to use for appraising an apartment building with consistent income and expenses?

The most appropriate method for appraising an apartment building with consistent income and expenses is direct capitalization. This approach involves estimating the value of the property based on the income it generates, specifically through the net operating income (NOI). The direct capitalization method simplifies the appraisal process by applying a capitalization rate to the NOI, offering a clear snapshot of profitability relative to the property's current earnings.

Using this method is efficient when the income and expenses of an apartment building are stable and predictable, which enhances the reliability of the valuation. This is particularly relevant for income-producing properties like apartment buildings, where cash flow is a critical indicator of financial health and marketability. By calculating the value based on a normalized income stream, appraisers can provide an objective assessment that reflects current market conditions.

While other methods, such as discounted cash flow analysis or yield capitalization, can also be useful in certain scenarios—especially when future cash flows are projected or when dealing with properties with variable income—they are generally more complex and may require detailed assumptions about future growth rates and varying revenue streams. Therefore, for an apartment building with consistent income and expenses, direct capitalization is the most straightforward and widely used approach.