Question

Using which of the following would require the value of the land to be calculated separately from the value of the improvements?

a. the income approach

b. the cost approach

c. the sales comparison approach

d. the gross rent multiplier

Answer 1

The cost approach requires separate land valuation from improvements, commonly used in real estate for unique properties or new constructions.

Step-by-step explanation:

Using the cost approach would require the value of the land to be calculated separately from the value of the improvements on it. The cost approach involves estimating the cost of replacing or reproducing the improvements, minus any depreciation, and adding the land value, which must be assessed as if it were vacant. This appraisal method is commonly employed in real estate to evaluate properties where fewer comparable sales exist, like schools or churches, or when assessing new construction.