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The Cost Approach to Real Estate Valuation

July 10, 2017
  1. Estimate the market value of the land.
  2. Estimate the building’s replacement cost including builder’s profit.
  3. Deduct depreciation including physical deterioration, functional obsolescence, locational obsolescence, and economic obsolescence.

Use the cost approach for relatively new properties, unusual properties, or properties with few comparable transactions.

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From → Asset Valuation

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