Property Valuation
Contributory value is the concept that:
AEvery improvement adds exactly its full cost to property value
BThe value of an improvement is measured by how much it adds to the total property value, not its cost✓ Correct
CLand contributes more to value than improvements in urban areas
DDepreciation reduces an improvement's value proportionally to its cost
Explanation
Contributory value measures the actual value an improvement adds to the total property value, which may be more or less than its cost. For example, a pool costing $50,000 may only add $20,000 to market value — the pool's contributory value is $20,000.
Related Tennessee Property Valuation Questions
- A building has an economic life of 50 years and an effective age of 10 years. Its remaining economic life is:
- The 'highest and best use' of a property is defined as the use that is:
- An appraiser adjusts comparable sales for time to account for:
- When using the gross rent multiplier (GRM), if a property rents for $1,500/month and comparable properties sell at a GRM of 120, what is the estimated value?
- In the sales comparison approach, 'gross adjustments' should generally not exceed what percentage of the comparable's sale price per FNMA guidelines?
- The market value of a property assumes:
- The highest and best use of a property is defined as the use that is:
- In Tennessee's real estate market, the Nashville metropolitan area is known as one of the fastest-growing in the Southeast. This growth affects appraisals by:
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