Cost approach

The cost approach is often used for owner-occupied residential properties or special-purpose real estate where comparable sales are limited, or where income data is not the primary focus. Value is derived from the replacement/reproduction cost of the land and improvements, adjusted for depreciation (age and condition) and market factors.

Typical use cases:
• Owner-occupied houses and apartments
• Special-purpose properties

Key value drivers:
• Land value
• Replacement or reproduction cost
• Depreciation (age/condition)
• Market adjustment factors