In the Cost Approach, what is added after depreciation to reach total value?

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Prepare for the Nova Scotia Association of Realtors Exam. Study with flashcards and multiple choice questions, each question includes hints and explanations. Get ready for your exam!

Multiple Choice

In the Cost Approach, what is added after depreciation to reach total value?

Explanation:
In the Cost Approach, you determine total property value by adding the land value to the depreciated cost of the improvements. The land is not depreciated, so after estimating the replacement or reproduction cost of the improvements and subtracting depreciation, you bring in the land value to reach the overall value. The building and other improvements are already reflected in that depreciated cost, with fixtures included as part of the improvements, so they aren’t added separately after depreciation.

In the Cost Approach, you determine total property value by adding the land value to the depreciated cost of the improvements. The land is not depreciated, so after estimating the replacement or reproduction cost of the improvements and subtracting depreciation, you bring in the land value to reach the overall value. The building and other improvements are already reflected in that depreciated cost, with fixtures included as part of the improvements, so they aren’t added separately after depreciation.

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