please solve using The Three Approaches to Value:- income approach, the cost approach and sales comparison approach.

Apartmmt House Prgpy N ' hb rho tion The subject property is located in a desirable residential area zoned R-5 for high rise apartments. The neighborhood area is 95% developed with a variety of apartment structures ranging in height from three to eight stories. Structures vary in age from 2 to 20 years. All are in good physical condition. The area is well located within walking distance of a good elementary school, within two blocks of neighborhood shopping, and six blocks from a university campus. A bus stop is one- half block to the north at the intersection of North Beach Boulevard and 14th Street. The distance to the central business district is 3 miles and bus transportation is available at 30-minute intervals from 6 am. to 7 pm. and every hour from 7 pm. to 2 am. The occupants of the area are mostly college students who in groups of two to four share apartments. The reported vacancy ratio averages 6% to 8%. The trend is for continued land use as apartment development. The rental range for unfurnished apartments is 250 to 300 for two-room, kitchen, and bath, and 300 to 400 for three-room, kitchen, and bath apartments. The property is located in the middle of the block on 14th Street between Beach Boulevard to the west and 5th Avenue to the east. The site measures 100 feet on 14th Street to a depth of 150 feet. Improvement Data The subject apartment is a nearly new ve-story masonry structure. The exterior walls are brick veneer over concrete block. A partial basement contains the manager's apartment, the heating, air-conditioning, and elevator equipment, and adequate storage facilities for tenants- There are 40 two-room and bath apartments and 20 three-room and bath apartments. Each apartment is equipped with an electric range, dishwasher, and refrigerator. The building measures 80 feet on 14th Street to a depth of 90 feet. The overall building height is 56 feet. The building roof is built up and topped with crushed granite as protection against heavy rains. The windows are made of aluminum sash and of awning-type manufacture. The oors are carpeted throughout over concrete suboors. The basement apartment has vinyl tile over concrete slab. The basement utility area is reinforced concrete. The interior walls are nred out, insulated, and nished with drywall masonry board. Good-quality paint is used throughout except for the living room walls, which are attractively nished with wallpaper. The interior trim is white spruce. The two-room apartments contain 500 square feet and the three- room apartments contain 700 square feet. All bathrooms are fully tiled and tted with pastel-colored xtures. Each apartment has extra clothes closets off the entrance foyer and a walk-in closet in the master bedroom. The kitchen oors are covered with grease-proof vinyl tile. The entire structure is centrally heated and air conditioned with a Carrier Climatrol lrnace and condenser. Two standard automatic elevators serve the building. Off-street parking is adequate. The remaining economic life is judged to be 50 years. Accrued depreciation is negligible. There is no deferred maintenance. The lobby furniture is valued at 3,000. The land value is well established at 6.00 per square foot. Assessment and Insurance Data The subject property is assessed for ad valorem tax purposes at 1,500,000. Taxes are levied at 1.36 per 100 of assessed value by the county and at $0.84 by the city. Comprehensive and re insurance is based on 80% of building re- placement cost new. The insurance rate is 25 cent per 100 per year. Public liability insurance costs 350 per year. 1 2 3 4 Date of sale Current 6 months ago Current 2 ears a 0 Sale price 2.070,000 1,065,000 2,161,000 H Land value 195,000 95,000 210,000 260,000 Number of 6? 40 64 80 apartments Number of rooms 1 58 94 151 19'? E'ective gross 1300,000 152.140 304,366 334,000 income Operating ratio 42% 40% 42% 39% Remaining 45 years 40 years 50 years 48 years economic life E'ective age 5 years 10 years None 2 years Time adjustment: 6 months, none; 1 year, +5%; 2 years, +10%. Apply the straight-line method of asset recapture in adjusting for building age. Except for age, apartment structures are comparable in all respects, including location. Rental Income 302-room apartments at $400 102-room apartments at $325 153-room apartments at $530 53-room apartments at $625 IBasement at $300 The vacancy and collection loss allowance is 6%. Note that no revenue is collected from the superintendent, who occupies the unfurnished basement apartment. The rental amount is considered part of the superintendent's wages. tin 'ture Management 5% of effective gross income Payroll-superintendent 6,000 Electricity 2,400 Water and sewage charge 2,800 Heating fuel 2,600 Legal and administrative 1,000 Painting and decoratingevery 3 years 240 for 2-room apartments 320 for 3-room apartments Exterior maintenance every 5 years 8,000 Supplies 900 Corporate income tax 26,000 Elevator contract 2,000 Amortization 43,000 Repairs and general maintenance 1,400 Interest on mortgages 63,800 Reserve for Replacmm RangesIS-year life, cost each 560 Refrigerators1 5-year life, cost each 545 Dishwashers1 2-year life, cost each 430 Lobby Jrniturel 0-year life 3,000 Equipmentnnace and pumps1 5-year life 20,000 Apply the annuity method of capitalization in deriving value via the income approach to value. The market indicates availability of mortgage funds up to 75% of property value at 10% interest. Equity mds are obtainable at an 8%return. Land investors seek an 8% return, whereas apartment investors expect 10.5% total return. Cost Data Analysis of comparable buildings constructed in recent months as well as information obtained from informed investor-builders support a replacement cost new of $50.00 per square foot exclusive of lrniture and kitchen equipment (ranges, refrigerators, and dishwashers). Depreciation is considered negligible. The estimated remaining economic life of the subject property is 50 years