Mastering Special Purpose Property Appraisal With This Trusted Approach
The Trusted Approach to Appraisal
A reliable method for appraising special purpose properties involves several key steps. First, understanding the highest and best use of the property is crucial. This involves analyzing the property's current use and potential alternative uses to determine its maximum value. Next, a cost approach is often employed, which involves calculating the cost to replace the property, minus depreciation, and adding the land value1.
Income capitalization is another vital approach, especially for properties like hotels or amusement parks, where income generation is a significant factor. This method estimates the present value of future income that the property is expected to generate2. By combining these approaches, appraisers can provide a comprehensive valuation that considers all aspects of the property's potential.