1. Sales Approach: Factors such as size, location, condition, and amenities of the similar sold properties are compared to determine fair market value.
2. Cost Approach: Cost to replace or reproduce the property (land value, construction costs, and depreciation) are considered.
3. Income Approach: Commonly used for commercial properties and rental properties. The assessor considers factors such as rental income, operating expenses, and market capitalization rates to determine the property’s value.
4. Capitalization Of Income Approach: Variation of the income approach, calculates the property’s value by dividing the net operating income by the capitalization rate.
5. Cost Per Square Foot: Commonly used for residential properties and is based on the assumption that properties with similar sizes have similar values (multiply the cost per square foot by the total square footage of the property).
6. Gross Rent Multiplier (GRM): Used to value rental properties. Multiply the gross rental income by the GRM, which is derived from comparable rental properties in the area.