Property Valuation
The cost approach to value is MOST appropriate for appraising:
AIncome-producing apartment complexes
BUnique or special-purpose properties with few comparable sales, such as churches or schools✓ Correct
CSingle-family homes in active residential neighborhoods
DVacant commercial lots
Explanation
The cost approach is most useful for special-purpose properties (churches, schools, government buildings) where there are few comparable sales, or for new construction. It estimates value as land value plus depreciated cost of improvements.
Related Arkansas Property Valuation Questions
- A property has replacement cost new of $200,000, depreciation of $40,000, and land value of $50,000. What is the appraised value under the cost approach?
- Functional obsolescence in a property is caused by:
- The principle of PROGRESSION states that:
- The principle of anticipation holds that value is determined by:
- When using the sales comparison approach, a 'gross living area' adjustment is made because:
- The principle of REGRESSION states that:
- Accrued depreciation in the cost approach equals:
- In the income approach to value, Net Operating Income (NOI) is calculated as:
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