What are the three primary approaches to value utilized in mass appraisal?

The three primary approaches to value utilized in mass appraisal are the cost approach, sales comparison approach, and income approach. Each of these methods serves a unique purpose in determining the value of a property.

The cost approach estimates value based on the cost to replace or reproduce the property minus any depreciation. It is particularly useful for new or unique properties where comparable sales data may be limited.

The sales comparison approach involves analyzing the sale prices of similar properties in the same area to deduce a value for the subject property. This approach relies heavily on market data and is effective when there is a robust database of recent sales to reference.

The income approach calculates value based on the potential income a property can generate, taking into account operating expenses and capitalization rates. This method is particularly useful for income-producing properties, like multifamily housing or commercial real estate, where revenue generation is a key factor in valuation.

By combining these three approaches, mass appraisal can effectively assess property values for taxation or other purposes, ensuring a comprehensive view that considers various aspects of real estate.