Free Cost Approach Calculator
Estimate property value by summing land value with depreciated replacement cost of improvements.
USD
USD
years
years
Indicated Property Value
$483,333
Depreciated Improvement Value$333,333
Accrued Depreciation$66,667
Indicated Property Value vs Land Value
Cost Approach to Property Valuation
The cost approach estimates value by adding land value to the depreciated replacement cost of improvements.
Formula
Value = Land Value + (Replacement Cost - Accrued Depreciation)
Accrued Depreciation = Replacement Cost x (Effective Age / Useful Life)
When Used
Example Calculation
Land is valued at $150,000. The building would cost $400,000 to replace and has an effective age of 10 years out of a 60-year useful life.
- 01Accrued depreciation: $400,000 x (10 / 60) = $66,667
- 02Depreciated improvement value: $400,000 - $66,667 = $333,333
- 03Indicated property value: $150,000 + $333,333 = $483,333