RES 431 Lecture 10: 10_RES 431 M001 Petrova 2-27-17
10 May 2017
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If monthly appreciation is 0. 32% . property was sold 5 months ago it would be. 2 concepts of cost: replacement cost, reproduction cost. Annual depreciation: residential = cost / 27. 5: commercial = cost / 39. Accrued depreciation: annual depreciation * nbr of years you held the property (from when you bought it), if new its from the time built. Types of accrued depreciation: physical deterioration, functional obsolescence, external obsolescence. + 7128 * 0 = value of subject using regression analysis. Cost of residential construction in the area is 150$/sf. The price of land on which the house is built is 5000$. Find the price of the house. (including land) 150*2490=373500 annual depreciation = 373500 / 27. 5 = 13582 accumulated (accrued) depreciation = 13582 * 6 = 81491. Calculating house value using the income approach (only used for properties that do not produce income) (house, school, hospital, not developed land, empty office building) (like dividend discount model)
