Which appraisal method focuses on the cost of duplication of a property?

The cost approach is the appraisal method that focuses on the cost of duplication of a property. This method estimates the value of a property by evaluating the cost to construct a similar property with the same utility, less any depreciation. The core idea is that a buyer would not pay more for a property than what it would cost to create a replica of it, which includes the cost of materials, labor, and any additional costs necessary for construction.

This method is particularly useful for newer properties where the cost to build is known and can be directly compared to the current market value. It is also applicable in situations where there are few comparable sales, such as unique properties or in specific types of real estate such as government buildings or schools where reproduction costs are more relevant than market sales data.

Other options involve different valuation strategies that do not rely on reproduction costs. The sales comparison method evaluates properties based on the sale prices of similar properties, which may not directly correlate with replacement costs. The income approach is based on the income potential of a property, primarily considering investment properties and rentals rather than duplication costs. The hybrid approach combines elements of multiple methodologies, but it does not singularly focus on the cost of duplication.