Property Valuation
The 'cost to cure' method of depreciation estimates functional obsolescence by calculating:
AThe land value
BThe cost to correct the deficiency versus the resulting value increase✓ Correct
CTotal replacement cost
DThe market value directly
Explanation
For curable functional obsolescence, depreciation is estimated as the cost to cure the deficiency (fix the problem), provided the cure is economically justified (cost to cure ≤ increase in value).
Related Georgia Property Valuation Questions
- The 'principle of regression' in real estate valuation holds that:
- A 'retrospective appraisal' values a property:
- An appraiser who determines that a property's 'highest and best use' is a multi-family development (rather than the existing single-family home) will typically value the land:
- The 'gross rent multiplier' (GRM) is calculated as:
- An appraiser determines that a property's contributory value of a swimming pool is $15,000. This means:
- In real estate appraisal, 'highest and best use' must satisfy which criteria?
- The 'cost approach' gives the most reliable indication of value when:
- The 'income approach' to value is MOST appropriate for:
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