The Cost Approach is a real estate appraisal method that estimates the value of a property by calculating the cost of reconstructing the structure on the same piece of land. This approach considers the depreciated reproduction or replacement cost of improvements, plus the market value of the site.
The insurable value is the cost of total replacement of destructible improvements to a property, which insurers consider when issuing coverage.
Replacement cost refers to the expense associated with reconstructing or replicating a building to perform the same function as the original structure. This concept is pivotal in insurance and real estate investment.
Reproduction cost is the expense involved in duplicating a property exactly, denoting the total amount required to construct a replica of the structure using the same materials, design, and workmanship as the original.
