The concept and formula for capitalization of income is so simple. So, why are there so many problems with it? The answer lies in the definition of the term "income". Is it this year's income or next year's? Is it before or after the costs of leasing, replacement reserves, and tenant improvements? As outlined in his article "The elusive definitions of NOI and OAR" Mr. Francis shows how even supposedly the most sacrosanct appraisal textbook uses ambiguous definitions.

All too often appraisers are confused by the various definitions or just work too fast to properly define the important terms. The results can be devastating to appraisal results. Just as with DCF's, some of Mr. Francis' most significant wins have come from uncovering errors in opposing appraisers' development of cap rates.