Oct 9, 2025 · Read on below to learn more about the cost approach, including what it is, how it's calculated, and when it's best used.

The formula used for cost approach appraisal is as follows: Property Value = Reproduction/Replacement Cost – Depreciation + The Value Of Land.

Feb 20, 2024 · The Cost Approach is a real estate appraisal method that estimates a property’s valuation based on the cost to replace or reconstruct the property, minus accumulated …

Oct 7, 2025 · When all estimates have been gathered, the cost approach is calculated in the following way: cost – depreciation + land worth = value of the property. The cost approach is …

Sep 3, 2024 · The cost approach determines value by adding the value of the land to the cost of a new equivalent building, then subtracting out any depreciation. We walked through how …

Dec 11, 2025 · Total Property Value is derived by summing the value of the land, adding the estimated cost of improvements, and then subtracting accrued depreciation. This formula is …

The cost approach is one of the three main methods used in calculating the value of real estate properties. The cost approach method is based on the assumption that a potential buyer of a …

Aug 23, 2024 · The Cost Approach to property valuation operates on the principle that a buyer shouldn't pay more for a property than the cost of constructing a comparable one from the …

Jul 21, 2024 · The cost approach appraisal method is a valuation method based on the idea that a property should be priced based on the cost of the land plus the cost of construction minus …

What is the Cost Approach formula? According to this approach, the value of a given property is equal to: Property Value = Total construction costs + Value of land - Depreciation. Total …