Question

A property is being appraised by the Cost Approach. The appraiser estimates that the land is worth $33,000 and the replacement cost of the home is $110,000. A new $20,000 garage was recently added. Total depreciation from all causes is $7,000. What is the indicated value of the property?

Answer 1

Answer: The value of the property is $156000.

Explanation: The value according to the cost approach is given by

(The estimated value of the land + The replacement cost of the house + additional improvements) - (Depreciation).

Therefore the calculation is:

(33000 + 110000 + 20000) - (7000) = $ 156000.