Appraisers use two ways to capitalize net operating income (NOI) into a value using residual income. These are what?

The correct answer reflects the methods used by appraisers to determine the value of real estate through the analysis of net operating income (NOI). The building residual technique involves estimating the value of the property after deducting expenses related to the land and other costs associated with the property itself. This technique recognizes the income generated from the building and its ability to generate value above those costs.

In contrast, the land residual technique focuses specifically on valuing the land separate from the improvements made upon it. This method calculates the land's value based on its potential to generate income, essentially allowing appraisers to segregate the financial performance of the building from that of the land.

Together, these two residual approaches provide a comprehensive view of how the income generated by a property can be translated into a market value, offering a systematic way to evaluate the contribution of both the building and the land to the overall property value.

Other approaches mentioned, such as the cost approach and sales comparison method, primarily assess value through different methodologies, focusing more on cost estimations or comparative market analysis rather than the residual income analysis context provided by the correct answer.