Property Valuation
A property's estimated value using the cost approach would be calculated as:
ALand value + replacement/reproduction cost − depreciation✓ Correct
BNet operating income ÷ capitalization rate
CPurchase price + improvements − land value
DSale price of comparable + market adjustments
Explanation
The cost approach estimates value as: Land Value + (Reproduction or Replacement Cost New − Accrued Depreciation). This approach is most useful for unique or special-purpose properties.
Related New Hampshire Property Valuation Questions
- The principle of substitution states that:
- The concept of 'functional utility' in NH appraisal refers to:
- Net operating income (NOI) for an investment property is calculated as:
- An appraisal adjustment for a superior comparable sale (a comp that is better than the subject) results in:
- When comparing two properties in the same Manchester, NH neighborhood, an appraiser adjusts for the fact that one sold 18 months ago while the other sold last month. This is called a:
- A NH appraiser notes that a property's neighborhood is in the 'decline' phase of the neighborhood life cycle. This typically means:
- The gross rent multiplier (GRM) method of estimating value is most commonly used for:
- In the income approach to value, the capitalization rate is used to:
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