What are the three main approaches to property valuation?

The three main approaches to property valuation are indeed the Sales Comparison Approach, the Cost Approach, and the Income Approach. Each of these methods serves different purposes in the valuation process.

The Sales Comparison Approach involves comparing the subject property to recently sold properties that are similar in nature. It is particularly effective in residential real estate, where comparative market analysis can provide a clear indication of market value based on actual transactions.

The Cost Approach estimates value by considering the cost to replace or reproduce the property, minus depreciation. This method is particularly useful for valuing new constructions or unique properties where comparable sales may not be available.

The Income Approach is primarily used for income-producing properties, such as rental buildings or commercial real estate. It calculates value based on the income the property is expected to generate, factoring in operating expenses and necessary capitalization rates.

In summary, the Sales Comparison, Cost, and Income Approaches are foundational methods in property appraisal, and each has its own strengths and applications depending on the type of property being assessed and the data available.