Property Valuation
In Minnesota, an appraiser who determines a property's value based primarily on what it would cost to build it today is using the:
AIncome approach
BSales comparison approach
CCost approach✓ Correct
DGross rent multiplier method
Explanation
The cost approach estimates value by calculating what it would cost to reproduce or replace the improvements today, less depreciation, plus land value. It is most relevant for new construction, special-use properties, or situations where sales and income data are insufficient.
Related Minnesota Property Valuation Questions
- A Minnesota rental property has potential gross income of $96,000, vacancy and credit loss of 5%, and operating expenses of $32,000. What is the NOI?
- In Minnesota, the 'reconciliation' step in the appraisal process involves:
- In Minnesota, an appraiser's certification in the appraisal report confirms that they:
- A Minnesota appraiser adjusts a comparable upward by $12,000 because the subject property has a finished basement that the comparable lacks. This adjustment reflects:
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- A Minnesota appraiser's final value reconciliation requires reconciliation among three approaches. Which approach typically receives the most weight for a residential property?
- Which type of depreciation in a Minnesota appraisal is caused by factors outside the property, such as a nearby industrial facility?
- Depreciation in real estate appraisal (for the cost approach) is defined as:
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