Property Valuation
The cost approach to real estate valuation estimates value by:
ACapitalizing the net operating income
BAdding the land value to the depreciated replacement cost of improvements✓ Correct
CComparing to recent sales of similar properties
DCalculating gross rent multipliers
Explanation
The cost approach estimates value as the land value plus the cost to replace the improvements (buildings) minus accrued depreciation. It is most useful for new construction or special-use properties.
Related Vermont Property Valuation Questions
- Vermont's Mount Snow and Okemo ski properties command valuation premiums because of:
- In Vermont appraisal, the cost approach is MOST reliable for valuing:
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- Vermont's 'contributory value' of an improvement measures:
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- Vermont appraisers are required to hold which license or certification under federal law?
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