What does capitalization in real estate ultimately aim to achieve?

Capitalization in real estate primarily aims to convert income into a measurable property value. This process involves applying a capitalization rate to the property's income, providing investors and financial analysts with a straightforward method to assess the value of a property based on its ability to generate income. This approach allows potential buyers and investors to understand the financial viability and potential return on investment for a property, making it a cornerstone of real estate valuation.

While maximizing rental income and ensuring compliance with local tax regulations are essential aspects of property management and ownership, they do not encapsulate the primary goal of capitalization itself. Similarly, evaluating property market trends is important for understanding the broader context in which a property operates, but it does not directly relate to the specific financial method of converting income into value, which is the essence of capitalization.