The Building Residual Technique is an appraisal method where the income attributed to land is subtracted from the net operating income to determine the income generated by the building, which is then capitalized into the building's value.
In finance and real estate, capitalization is the process of deriving a present value for future income through a capitalization rate. In accounting, it involves setting up an asset on financial records to be depreciated over its useful life rather than expensed immediately.
