Some Principles and Procedures of the Cost Approach to Real Estate Value

• Autorzy: Sabina Źróbek , Ryszard Źróbek
• Języki publikacji: EN

Abstrakty

EN

In the theory, the term 'cost' in real estate valuation procedure is defined as the amount needed to construct a building nowadays. Thus, value, price and cost might possibly be equal for a new property (WURTZEBACH 1995). The fundamental idea of the cost approach is the choice of any individual to pay the price for particular property, which is based on the cost of construction, or value of production, an alternative, or replacement, property with utility that is comparable to a proposal, or existing subject (WILSON 1998). The cost approach relies on the principle of substitution and cost should exceed the price of an existing building. The value of built-up real estate is roughly equal to the cost of reproducing the improvements minus the amount of accrued depreciation plus market value of the land. Market value of real estate is usually determined with the use of one of three approaches. One of them is cost approach. The cost approach is based on the amount of money required to reproduce or replace the production capacity of the property at the time of the valuation (substitution). The cost of building a substitute facility and the differential in operating costs between the substitute facility and the subject set the upper limit for how much the buyer will pay for the subject. (fragment of text)

Słowa kluczowe

EN

Real estate's value; Real estate valuation; Costs

PL

Wartość nieruchomości; Wycena nieruchomości; Koszty

• Czasopismo: Studia i Materiały Towarzystwa Naukowego Nieruchomości
• Rocznik: 2011
• Tom: Selected Aspects of the Cost Approach in Property Valuation
• Strony: 25--39

Twórcy

autor

Sabina Źróbek

autor

Ryszard Źróbek

Bibliografia

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