What is the final step in the cost method of appraisal?

In the cost method of appraisal, the final step is to add the depreciated cost of the improvements to the value of the land. This step is crucial as it provides the comprehensive value of the property by accounting for both the current value of the structures on the land, adjusted for depreciation, and the intrinsic value of the land itself.

The process begins with estimating the cost to replace or reproduce the building, followed by applying depreciation to reflect the property's current condition and utility. Once you arrive at the depreciated value of the improvements, combining that with the land value yields the overall property value, which is fundamental for understanding the investment's worth in the context of various stakeholders, including owners and potential buyers.

This adds clarity to the appraisal by ensuring that both components of property value—land and improvements—are accurately accounted for, thus providing a well-rounded perspective of the property’s value in the market.