About This Chapter
Cost Approach in Real Estate - Chapter Summary
Working through these lessons can deepen your knowledge of the cost approach in real estate, such as its benefits and limitations. Along the way, our educators discuss property depreciation, including why it's important. After reviewing the lessons, you should be able to:
- Recall the process used for the cost approach to property valuation
- List standard sources from which cost information for real estate is obtained
- Describe how to estimate replacement and reproduction costs
- Recount various types of obsolescence that play a role in depreciation
- Explain how property depreciation is estimated
- Outline reconciliation to the indicated value using the cost approach
These lessons can alleviate any concerns you have about understanding the cost approach in real estate. There's even a Help feature that enables you to submit questions to experts if you get stuck on a topic. A self-assessment quiz is available for each lesson, which is a great way to make sure you understand the topics covered.
1. Cost Approach to Property Valuation: Definition & Process
In this lesson, we will learn about the cost approach to valuation, a widely-used method for determining market value of real property. We will explore some of the benefits and limitations of this method. Test your knowledge afterward with a quiz.
2. Sources of Cost Information for Real Estate Valuation
This lesson examines the cost approach method of real estate valuation and the basic process involved. We will discuss standard sources for cost information and suggestions for their application.
3. Estimating Replacement & Reproduction Costs in Real Estate
What are the differences between estimating the replacement cost and the reproduction cost in real estate appraisal? How do you estimate them using the cost approach to real estate valuation? Learn about the different approaches in this lesson.
4. Property Depreciation: Definition, Importance & Types
This lesson defines depreciation as it applies to real estate property valuation. We will cover the different types of obsolescence that are factors in depreciation.
5. Methods for Estimating Property Depreciation
In this lesson, you will learn how to identify and describe methods for estimating accrued property depreciation (e.g. straight-line method of calculating depreciation) and learn how to estimate depreciation.
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Other chapters within the Ohio General Appraiser Exam: Study Guide & Practice course
- Real Property & Property Ownership
- Real Estate Value
- Government Powers in Real Estate
- Surveying Property in Real Estate
- Building Components & Structures
- Liens & Encumbrances in Real Estate
- Rights to Use in Real Estate
- Land & Site Valuation
- Statistics, Valuation Models & Finance for Real Estate
- Common Real Estate Calculations
- Sales Comparison Approach in Real Estate
- Income Approach in Real Estate
- Reconciliation in Real Estate Appraisal
- USPAP Compliance
- Real Estate Appraisal Report Writing