To obtain value using the IRV formula, one must perform which operation on the income?

The IRV formula, which stands for Income, Rate, and Value, is a fundamental concept in real estate appraisal used to calculate the value of an income-producing property. This formula is expressed as:

Value = Income / Rate

To derive the property value using this formula, you start with the income generated by the property and divide it by the capitalization rate (Rate). This division allows appraisers to determine how much an investor is willing to pay for a dollar of net operating income, thereby providing an estimate of the property's market value based on its income potential.

Understanding this operation is crucial, as it reflects the relationship between income and value in property appraisal. The other options, such as adding, subtracting, or multiplying, do not accurately depict the process involved in calculating property value through the IRV formula. In essence, dividing the income by the capitalization rate provides a clear and methodical approach to ascertain the property's value based on its income-generating capacity.