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Cost Approach Appraisal Formula

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Property Value refers to the estimated monetary worth of a real estate asset or property at a given point in time. Check FAQs

PV = RC - D + V L

PV - Property Value?RC - Reproduction Cost?D - Depreciation?V_L - Value of Land?

Cost Approach Appraisal Example

With values

With units

Only example

Here is how the Cost Approach Appraisal equation looks like with Values.

Here is how the Cost Approach Appraisal equation looks like with Units.

Here is how the Cost Approach Appraisal equation looks like.

418120 = 30000 - 11880 + 400000

418120 = 30000 - 11880 + 400000

418120 = 30000 - 11880 + 400000

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Cost Approach Appraisal Solution

Follow our step by step solution on how to calculate Cost Approach Appraisal?

FIRST Step Consider the formula

PV = RC - D + V L

Next Step Substitute values of Variables

∴

PV = 30000 - 11880 + 400000

Next Step Prepare to Evaluate

∴

PV = 30000 - 11880 + 400000

LAST Step Evaluate

∴

PV = 418120

Cost Approach Appraisal Formula Elements

Variables

Property Value

Property Value refers to the estimated monetary worth of a real estate asset or property at a given point in time.

Symbol: PV

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Property Value

Reproduction Cost

Reproduction Cost is a valuation method used in real estate appraisal to estimate the cost of replicating or reproducing a property exactly as it stands.

Symbol: RC

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Reproduction Cost

Depreciation

Depreciation is an accounting method of allocating cost of tangible asset over useful life. Monetary value of asset decreases over time due to obsolescence. This decrease is measured as depreciation.

Symbol: D

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Depreciation

Value of Land

Value of Land refers to the estimated monetary worth of a parcel of land or real property without considering any improvements or structures on it.

Symbol: V_L

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Value of Land

Other formulas in Mortgage and Real Estate category

Go Vacancy Rate

VR = \frac{U Vacant \cdot 100}{U Total}

Go Gross Income Multiplier

GIM = \frac{PSP}{EGI}

Go Effective Gross Income

EGI = GRI + OI - VBD

Go Gross Rental Income

GRI = \frac{PV}{GRM}

How to Evaluate Cost Approach Appraisal?

Cost Approach Appraisal evaluator uses Property Value = Reproduction Cost-Depreciation+Value of Land to evaluate the Property Value, The Cost Approach Appraisal is a real estate valuation method used to estimate the value of a property by determining the cost to replace or reproduce it with a similar property of equal utility and functionality. Property Value is denoted by PV symbol.

How to evaluate Cost Approach Appraisal using this online evaluator? To use this online evaluator for Cost Approach Appraisal, enter Reproduction Cost (RC), Depreciation (D) & Value of Land (V_L) and hit the calculate button.

FAQs on Cost Approach Appraisal

What is the formula to find Cost Approach Appraisal?

The formula of Cost Approach Appraisal is expressed as Property Value = Reproduction Cost-Depreciation+Value of Land. Here is an example- 418120 = 30000-11880+400000.

How to calculate Cost Approach Appraisal?

With Reproduction Cost (RC), Depreciation (D) & Value of Land (V_L) we can find Cost Approach Appraisal using the formula - Property Value = Reproduction Cost-Depreciation+Value of Land.

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: Unit

Cost Approach Appraisal Formula

Cost Approach Appraisal Example

Cost Approach Appraisal Solution

Cost Approach Appraisal Formula Elements

Other formulas in Mortgage and Real Estate category

How to Evaluate Cost Approach Appraisal?

FAQs on Cost Approach Appraisal

Variable Name