A method of capitalization using net income remaining to building after interest on land value has been deducted.
An appraisal technique whereby income to land is subtracted from net operating income to result in the building income. Building income is capitalized into building value.
The Building Residual Technique is used by an appraiser when determining the contribution of a building to the value of the entire property. The unknown (desired) factor is the value of the building.