Which of the following is NOT one of the three main approaches to property appraisal?
Correct Answer
B) Depreciation approach
The three recognized approaches to property valuation are the cost approach, income approach, and comparison (or market) approach. Depreciation is a component considered within these approaches, not a separate valuation method.
Why This Is the Correct Answer
The depreciation approach is not one of the three main approaches to property appraisal. The three recognized approaches are: Cost approach (replacement/reproduction cost minus depreciation), Income approach (capitalization of net income), and Comparison/Market approach (comparing similar properties). Depreciation is a factor considered within the cost approach to account for physical deterioration, functional obsolescence, and economic obsolescence, but it is not a standalone valuation methodology.
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In Ontario, what is the key difference between an appraisal and a Comparative Market Analysis (CMA)?
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