What does the term "going concern" refer to in property appraisal?

The term "going concern" in property appraisal primarily refers to the incremental value associated with the intangible assets of a business that is actively operating. This concept highlights the value that exists beyond just the physical assets and earnings that a property may generate. It encompasses the overall ability of a business to continue operations, which includes factors such as brand recognition, customer loyalty, operational efficiencies, and established processes.

This intangible value is significant when appraising properties that generate income, as it reflects the additional worth brought by a business's established operational status. For instance, a hotel that has a strong brand and loyal customer base possesses a higher value than just the sum of its physical assets and the income it generates from current operations.

The other choices do not capture the complete essence of what "going concern" means in this context. While income from an income-producing property is certainly a critical factor, it does not fully encompass the broader implications of continuing business operations which include those intangible aspects. Tangible personal property is focused on physical assets, which misses the broader concept of ongoing business value. An ongoing problem with an improved property represents a potential detriment rather than the intrinsic value of the business operations themselves.