Laserfiche WebLink
VALUATION METHODS <br /> Typically, there are three approaches to value used when appraising real property. They are the <br /> Direct Sales Comparison Approach, Income Approach, and the Cost Approach. <br /> The Direct Sales Comparison method compares the subject directly to properties that have sold <br /> with any differences taken into consideration such as age of the building, size, location, condition, <br /> and other factors the market would recognize. <br /> The Income Approach analyzes the potential annual income the subject should be able to <br /> generate. The vacancy rate is estimated and subtracted from the potential gross income to arrive <br /> at an effective gross income. Then all direct expenses are subtracted from the effective gross <br /> income to arrive at an annual net operating income. The annual net income is then converted into <br /> a value by dividing it by an overall capitalization rate, which is found to be acceptable by market <br /> investors for similar properties. <br /> The Cost Approach takes into consideration the cost to construct the improvements with current <br /> materials and labor. Depreciation, if applicable, is estimated and then subtracted from the total <br /> replacement costs. The value of the site is then added to the depreciated replacement cost to arrive <br /> at a total indicated value. <br /> All three approaches to value will be used in valuing the subject. <br /> Since no market extraction data was found to extract the value of outbuildings, the depreciated <br /> cost method will be used for estimating the value of the pole building and material shelter. <br /> 23 DAVIS APPRAISAL COMPANY <br />