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How is Property Assessed?

April 8, 2020
By: Amelia Scherba

Determining a property’s market value is the first step in assessing. In order to estimate the market value, the assessor can use three different methods. They have the option of choosing any one or any combination of the three.

A property’s value can be estimated in three different ways:

1. Sales Evaluation

The assessor compares the property to similar properties that have recently sold in the area. This approach is typically used to value residential, vacant, and farm properties.

2. Cost Evaluation

The assessor determines your property value based on how much it would cost to replace it, using today’s labor and material prices minus depreciation plus the market value of the land. This approach is typically used to value industrial, special-purpose and utility properties.

3. Income Evaluation

The assessor determines your property value based on how much income you would make from the property if it were to be rented. Using this method, the assessor considers the costs of maintaining the property, managing the property, insurance, and taxes, as well as the return you could reasonably anticipate from the property.

 

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