Cost Approach in Real Estate Appraisal: Explained for Business Owners

The cost approach is a widely used method in real estate appraisal that provides business owners with valuable insights into the value of their properties. By estimating the cost to replace or reproduce a property, taking into account depreciation and obsolescence, this approach allows for a comprehensive evaluation of its worth. For instance, consider a hypothetical scenario where a business owner seeks to determine the value of their commercial building. The cost approach would involve assessing various elements such as construction costs, land value, and any necessary adjustments based on…