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?
Correct Answer
A) Income approach as it reflects the property's economic value
For income-producing properties with limited comparable sales, the income approach typically receives primary weight because it directly reflects the property's ability to generate economic returns. The cost approach may not reflect market preferences for heritage properties, and comparison approach is limited without adequate comparables.
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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?
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An appraiser is valuing a unique heritage property with no recent comparable sales. The replacement cost is estimated at $800,000, land value is $200,000, and total depreciation is calculated at $150,000. What is the indicated value using the cost approach?