Property Valuation
The cost approach to value starts with:
AEstimating the property's income potential
BComparing recent sales of similar properties
CEstimating land value plus the depreciated cost of improvements✓ Correct
DMultiplying gross rent by the gross rent multiplier
Explanation
The cost approach estimates value as the land value (using comparable land sales) plus the depreciated cost to reproduce or replace the improvements on the property.
Related Arizona Property Valuation Questions
- In Arizona, when appraising a property in a 'declining market,' the appraiser must:
- In the income approach, a property generates $36,000 annual net operating income (NOI). If the capitalization rate is 6%, what is the estimated value?
- Regression in real estate valuation refers to:
- An Arizona appraiser using the cost approach estimates the value of a home as follows: land value = $80,000; replacement cost new of improvements = $220,000; accumulated depreciation = $30,000. What is the estimated value?
- The sales comparison approach to value is MOST appropriate for:
- External obsolescence affecting an Arizona property's value might be caused by:
- Which type of depreciation in real estate appraisal is considered incurable?
- Market value in Arizona real estate appraisal is most accurately defined as:
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