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<br />THE APPROACHES TO VALUE <br /> <br />There are three basic approaches to value: <br /> <br />1. COST APPROACH <br />In the cost approach, the appraiser estimates the <br />cost of reproduction of the building and land impove- <br />ments; subtracts for depreciation due to wear and <br />tear, design and plan, and neighborhood defects; and <br />then adds for land. <br /> <br />2. INCOME APPROACH <br /> <br />In the income approach, the appraiser estimates the <br /> <br />fair rental value (if not available from rent records) <br /> <br />and translates the net income into value by applica- <br /> <br />tion of interest and capitalization rates. <br /> <br />3. MARKET DATA APPROACH <br />In the market data approach, the appraiser compares <br />the subject property on a unit bases with similar <br />properties which have sold recently. <br /> <br />J:: <br />