The cost approach asks, “How much would it cost to replace the property with one of equal utility?”.
Usually used to appraise types of properties that generate income, such as offices, hotels or retail centers.The income approach asks, “What would an investor pay in anticipation of future income from the property?”.The market approach is most often used to appraise residential property.The market approach asks, “What are properties similar to this property selling for?”.The appraisal district may use three common methods to value property: Market Data Comparison Approach (also known as the sales comparison approach) They consider differences such as age, location and use to appraise all the properties in each class. Using data from recent property sales, appraisal districts determine the value of properties in each class. In a mass appraisal, the appraisal district classifies categories of properties according to a variety of factors. The Tax Code authorizes appraisal districts to use a method called mass appraisal to calculate the value of a large number of properties. The annual property tax levy includes four phases:
