Which appraisal approach is most often used for a property that will be purchased for investment purposes?

The market comparison approach, also known as the sales comparison approach, evaluates a property by comparing it to similar properties that have recently sold. While useful for residential properties, it does not account for income potential, making it less applicable for investment purposes where cash flow is a primary concern.

The cost approach involves calculating the replacement cost of a property minus depreciation. While it provides insights into the value of a property based on construction costs, it does not reflect the income potential necessary for investment decisions, making it less relevant for buyers seeking investment properties.

Market data typically refers to various statistics and trends influencing property values in a specific area. While important for understanding general market conditions, this approach does not directly evaluate the income-generating capabilities of a property, which is critical for investment analysis.