Alabama Real Estate Practice Exam

Effective gross income is a valuable component in property appraisal as it takes into account both the potential income and potential losses due to vacancies. This helps to provide a more accurate and realistic assessment of the property's potential income. Options A, C, and D are incorrect because they do not fully consider all potential aspects of the property's income and expenses. Option A only considers expenses without taking into account potential income, which can greatly impact the overall value of the property. Option C only accounts for capital repairs and does not consider other sources of income or potential losses. Option D refers to appreciation value, which is not directly related to the property's income potential.