What approaches get considered while performing a commercial appraisal?

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A commercial property's value gets determined in various ways, and each of these ways gets built on a foundation of similar data. These data may detail information about a specific property or reveal general information on the community, neighborhood, city, or region.



However, there are three main approaches that get considered while appraising commercial real estate, and these are:

1- Cost approach:
With the cost approach, the property's value gets determined by comparing it to constructing an exact replica of your property. However, many questions get raised while using this approach. Hence, it is used only to appraise new or unique properties that have few similar sales.  

2- Sales comparison/market approach:
Many people in the commercial real estate appraisal industry believe that the sales comparison/market approach is more accurate as it equates the value based on similar features between the properties and takes the current market value into account.

3- Income capitalization approach:
According to the income capitalization approach, the property's value gets estimated based on the income it will generate over time. When it comes to rental properties, the investor considers the net income generated from the property and other factors to determine its value in the contemporary market. 

Bottom line
We hope this blog post was able to provide you with the maximum information that you were looking for in regards to commercial appraisals in san diego county.

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