An appraiser is valuing a unique heritage building with no recent comparable sales. The building generates rental income but also has significant historical restrictions on modifications. Which combination of approaches would be most appropriate?
Correct Answer
B) Cost and income approaches, with careful consideration of restrictions
For unique properties with income potential but restrictions, using both cost and income approaches provides the most comprehensive valuation. The cost approach accounts for the building's unique features, while the income approach reflects its earning potential, with both adjusted for the impact of heritage restrictions.
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Previous Question
An appraiser is valuing a 40-year-old office building using the cost approach. The land is worth $500,000, replacement cost is $2,000,000, but the building has functional obsolescence due to outdated electrical systems valued at $150,000 and physical depreciation of $300,000. What is the estimated value?
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An appraiser is valuing a unique heritage building with no recent comparable sales. The building generates $180,000 annual NOI, but replacement cost is $3.2M with $800,000 in accrued depreciation. Which approach should receive primary weight in the final valuation?