Which approach to value combines land value with reproduction costs of an existing structure?

The correct answer pertains to the Cost Approach, which is a method used to determine the value of property. This approach evaluates the value of land separately from the improvements made on it, usually through the calculation of reproduction or replacement costs of the structure.

In the Cost Approach, the appraiser estimates the current cost to construct a duplicate of the existing structure, which is the reproduction cost. This cost is then added to the value of the land to arrive at the total property value. This method is particularly useful in situations where there are few comparable sales or when properties are unique, as it provides a concrete way to assess value based on tangible costs rather than market transactions.

Other methods like the Sales Approach focus on comparing similar properties that have sold recently without directly considering costs, and the Income Approach is more concerned with the income-generating potential of a property rather than its reproduction costs. Thus, the Cost Approach stands distinct in its focus on combining land value with structural costs to arrive at a property’s total valuation.