A Florida appraiser is valuing a gas station in Gainesville that has environmental contamination issues. The property has been remediated, but market perception remains negative. Recent sales of similar gas stations are limited, and the current operator's lease expires in two years. Which approach would likely be most challenging to apply reliably?
Correct Answer
A) Income approach due to lease expiration uncertainty
The income approach would be most challenging due to uncertainty about future income after lease expiration and the difficulty in projecting rental rates given the environmental stigma. The cost approach can account for remediation costs. The sales comparison approach, while limited, can still utilize available data with appropriate adjustments. The challenges are not equal across all approaches.
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In Florida appraisal practice, the cost approach typically considers all of the following types of depreciation EXCEPT:
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An appraiser in Naples is using the sales comparison approach for a waterfront home. A comparable property sold for $2,400,000 six months ago. The subject property is superior by $150,000 for view and inferior by $75,000 for age. Market conditions have increased 3% since the comparable sale. What is the adjusted sale price?