Question
QUESTION 2 To illustrate the application of cost approach in property analysis, consider an old and historical residential property example. This reproduction cost is estimated
QUESTION 2
To illustrate the application of cost approach in property analysis, consider an old and historical residential property example. This reproduction cost is estimated with the unit comparison (per square foot) method. The unit method is also used to calculate the depreciation.
Table of cost approach: historical residential property example.
Property component | Reproduction Depreciation | Percent of depreciation | Depreciation Value (RM) | Market Value (RM) |
Building 24 units Building: 30,000 sq ft @ 25 per sq ft |
750,000 |
_____? |
525,000 |
525,000 |
Site improvements:
Utilities |
6,000 |
5 |
5700 |
|
Paving Walkways Landscaping Outside lighting | 12,000 2,000 3,000 1,000 | 20 15 0 15 | 9,600 1,700 3,000 850 |
_______? |
Land Value: 5 acres @ 20,000 per acre |
|
|
|
100,000 |
Indicated value from Cost approach |
|
|
|
________? |
Total Estimated value (rounded) |
|
|
|
________? |
- Fill in the blank with the right value and illustrate the application of the cost approach, which considered an old and historic residential as mentioned above.
- How did the process of fundamentals of cost approach exist?
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