Property Valuation
The cost approach to value is most reliable for:
AOlder single-family homes in established neighborhoods
BUnique or special-purpose properties with few comparables✓ Correct
CApartment complexes with strong rental histories
DVacant land with no improvements
Explanation
The cost approach (land value + depreciated cost of improvements) is most useful for unique or special-purpose buildings (schools, churches, public buildings) where sales comparables are scarce.
Related Arkansas Property Valuation Questions
- A property's assessed value for tax purposes is determined by:
- Which appraisal principle holds that value is created by the expectation of future benefits?
- A comparable property sold for $250,000 but has a garage worth $10,000 that the subject property lacks. The adjusted value of the comparable for comparison to the subject is:
- Effective age differs from actual age in that effective age reflects:
- The capitalization rate (cap rate) in the income approach is used to:
- A property generates a net operating income of $30,000 per year. Using a capitalization rate of 6%, what is the indicated value?
- Functional obsolescence in a residential property is best illustrated by:
- Which type of depreciation is caused by factors OUTSIDE the property, such as a nearby highway being constructed?
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