IAAO – International Association of Assessing Officers which is an organization of professional assessors and assessing personnel with the purpose of improving the standards of assessment practice, educate the taxpaying public and increase the effectiveness of tax administration.  www.iaao.org.

Improvement – anything done to raw land with the intention of increasing its value. A structure erected on a property constitutes one common type of improvement, although other actions, such as those taken to improve drainage are also improvements. Note: easements are not considered improvements.

Improvements – buildings, other structures, and attachments or annexations to land that are intended to remain so attached or annexed, such as sidewalks, trees, drives, tunnels, drains and sewers.

Improvements Other than Buildings – a fixed asset account that reflects the acquisition value of permanent improvements, other than buildings, that add value to the land. Such as fences, retaining walls, sidewalks, pavements, gutters and tunnels.

Improvements to Land – designed to enhance a site’s utility for general use or to reshape the land’s natural contours for more specific use.

Income – the payments to its owner that a property is able to produce in a given time span, usually a year, and usually net of certain expenses of the property.

Income Approach – One of the three approaches to value, based on the concept that current value is the present worth of future benefits to be derived through income production by an asset over the remainder of its economic life. The income approach uses capitalization to convert the anticipated benefits of the ownership of property into an estimate of present value.

Income Capitalization – the process of dividing a property’s net annual income by a capitalization rate in order to arrive at an estimated value.

Incurable – a part of depreciation for which it is not economical to correct the condition, and if corrected, the cost of correcting the condition exceeds the value added.

Indirect Capitalization – any of the several techniques used in the income approach to value. Includes estimating factors as such as the rate of return on investment, remaining economic life, investment holding period, income path, depreciation or appreciation and reversionary value.

Indirect Costs – (1) overhead costs (2) costs incurred in construction away from the site such as fees, permits, insurance and loans.

Industrial Property – see property.

Ingress – an entrance or means of entering.

Instrument – a formal legal document such as a deed, contract, will or lease.

Interest (Interest Rate) – the premium paid for the use of money; a rate of return on capital; the equilibrium price in money markets. The interest rate usually incorporates a risk factor, a liquidity factor, a time-preference factor, an inflation factor and potentially other factors.

Interest (Interest Transferred, Interest Acquired) – the ownership rights of a person in a property. Complete ownership is called fee simple interest. It is possible to sell and to own separately the component interests, such as mineral rights and air rights, that make up the fee interest. See bundle of rights.

Internal Rate of Return – (1) the annualized yield rate on capital that is (or could be) generated by an asset or within a group of capital assets over a period of ownership. (2) the rate that discounts all future cash flows to a net present worth equal to the original investment. The internal rate of return is calculated, usually by trial and error, from a knowledge of the relevant cash flows.

Investment Analysis – a study that evaluates the relationship between acquisition price and anticipated future benefits of real estate investment.

Investment Holding Period – the length of time that typical investors generally hold an investment of a specified type.

Investment Trust – a type of investment company that sells it stock and invests the money received in stocks and bonds of other companies, real estate or other investments. Investment trusts can be open-end or closed-end.

Investment Value – the worth of an investment property to a particular investor. Investment value may or may not coincide with market value depending on the requirements of the specific investor.

Investment Yield – the rate of return on capital that is generated from an investment over a period of ownership, including both income and resale.

Irrevocable – that which cannot be recalled or revoked.

IRV – a mnemonic for the basic equation of the income approach: Income = (capitalization) Rate X Value.

J

Joint Tenancy – see tenancy.

Jurisdiction – (1) the right and power to interpret and apply the law; also, the power to tax and the power to govern (2) the territorial range of authority or control.