Tex. Tax Code § 23.012 — INCOME METHOD OF APPRAISAL

(a) If the income method of appraisal is the most appropriate method to use to determine the market value of real property, the chief appraiser shall: (1) analyze comparable rental data available to the chief appraiser or the potential earnings capacity of the property, or both, to estimate the gross income potential of the property; (2) analyze comparable operating expense data available to the chief appraiser to estimate the operating expenses of the property; (3) analyze comparable data available to the chief appraiser to estimate rates of capitalization or rates of discount; and (4) base projections of future rent or income potential and expenses on reasonably clear and appropriate evidence. (b) In developing income and expense statements and cash-flow projections, the chief appraiser shall consider: (1) historical information and trends; (2) current supply and demand factors affecting those trends; and (3) anticipated events such as competition from other similar properties under construction. Added by Acts 1997, 75th Leg., ch. 1039, Sec. 22, eff. Jan. 1, 1998. Amended by Acts 2003, 78th Leg., ch. 548, Sec. 1, eff. Jan. 1, 2004.