Real Estate Appraisal

What is the Cost Approach?

The cost approach combines as estimate of land value with an estimate of depreciated reproduction or replacemnt cost of the improvements. The principle of substitution is the basis of the cost approach, in that no rational person will pay more for a property than the amount for which he can obtain, by purchase of a site and construction of a building, with undue delay, a property of equal desirability and utility.

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