Final answer:
An appraiser's opinion for an apartment owner considering a swimming pool installation would be based on cost benefit analysis, weighing the potential benefits against the costs and opportunity cost of the investment.
Step-by-step explanation:
The owner of a 20-unit apartment building considering the installation of a swimming pool would ask an appraiser for an opinion based on the principle of cost benefit analysis.
This analysis involves weighing the expected benefits, such as increased desirability of the units and potential for higher rent, against the costs, including construction, maintenance, and additional insurance expenses. The appraiser would evaluate whether the perceived benefits add enough value to the property to justify the investment.
For instance, in this scenario, the appraiser would examine factors like the impact on rental income, tenant satisfaction, and property value. They will likely account for the opportunity cost of investing in the pool against other potential improvements or investments.
The decision for the apartment owner would be akin to how voters make decisions on public amenities, such as a community pool, where diverse stakeholder perspectives must be considered. Renters, business owners, and families all have different views on the value versus expense of such additions.