An owner spends $60,000 building a highly specialized recording studio inside a suburban starter home. Comparable sales suggest buyers would pay only about $15,000 more for the property because of that feature. Which appraisal principle best explains the result?
Correct Answer
D) Contribution to total property value
The principle of contribution asks how much a component adds to the value of the whole property, not how much it cost to install. If the studio increases market value by only about $15,000, its contributory value is $15,000 rather than $60,000.
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