Property Valuation
The principle of contribution states that the value of a component part of a property is:
AAlways equal to its cost of installation
BMeasured by the amount it adds to the total property value✓ Correct
CBased on the replacement cost of the feature
DEqual to the national average value for that feature
Explanation
The principle of contribution holds that the value of any part of a property is determined by how much it contributes to the overall property value, not by its cost. A swimming pool may cost $50,000 to install but only add $20,000 in value.
Related New Jersey Property Valuation Questions
- External (economic) obsolescence is considered incurable because:
- The principle of conformity states that property values are maximized when:
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- In New Jersey's active suburban real estate market, which valuation approach is most commonly used for single-family residential appraisals?
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