What is the name for a process that converts income to value?

The correct answer, Capitalization, refers to a financial method that converts an income stream into a present value estimate. In the context of real estate, this process typically involves taking the net operating income (NOI) generated by a property and applying a capitalization rate (cap rate) to determine the property's market value. This technique is fundamental for investors and appraisers to assess the worth of income-producing properties.

Capitalization provides a systematic approach to valuing properties based on the income they generate, making it an essential concept in real estate valuation practices. By focusing on the income produced by an asset and applying a rate that reflects the risk and return expectations, capitalization effectively translates the expected future cash flows into a present value.

Other options do not fit this definition. Appraisal is a broader term for determining the value of a property but does not specifically focus on converting income into value. Depreciation involves reducing the book value of an asset based on wear and tear or obsolescence, rather than converting income. Valuation is the overarching process of determining value but does not specifically relate to the income conversion process that capitalization encompasses.