How is forecasting utilized in the income approach of mass appraisal?

In the income approach of mass appraisal, forecasting plays a crucial role in predicting future rental income and expenses. This approach is based on the premise that the value of a property is intrinsically linked to the income it can generate over time. By forecasting future rental income, appraisers can estimate the potential revenue that a property may yield. This includes assessing market conditions, economic trends, and rental demand to arrive at a reliable prediction.

Additionally, forecasting future expenses is equally important, as it helps in understanding the net income that can be expected from the property. This projection involves considering factors such as maintenance costs, management fees, and other expenditures that may impact the property's profitability.

Ultimately, this comprehensive view of future income and expenses enables appraisers to derive a more accurate value for the property, aligning with the objective of the income approach. This approach is not solely focused on historical data or setting taxes, but rather on projecting future profitability, making option B the most relevant choice in this context.