An assessed value of a property is determined when it is appraised. The appraisal takes into account the value of the lot itself, and any structures on the lot, then estimates what each is worth.
Cost Analysis
The cost approach is a common assessment method used in real estate. It considers what it would cost to replace the structure. Using this approach, appraisers first estimate the value of the lot as if there were no structure on it. The value of the lot will depend on the area and how much land is available. When available land is scarce, the lot is worth more. The value of the structures on the lot is determined per square foot, based on the estimated production cost. Garages, porches and sheds are calculated separately, and their total value is added to the values of the lot and main dwelling to estimate the total value of a property.
Comparison Analysis
Another common assessment method is comparison analysis. This method looks at similar properties that have sold and assigns a value to the property being assessed based on this information. Value is added or subtracted if the assessed property is somewhat different from the compared properties. For example, if none of the similar properties had a garage, value would be added to the assessed property based on the size of the garage and whether it was heated and air conditioned.
Garage Value and Other Factors
While the appraisal method will make a difference to the assessed value of a garage, several miscellaneous factors, such as the structure's functional utility, may add or subtract from its total value. Functional utility is the habitability of the structure, which considers factors such as whether or not it is heated and cooled. Adjustments due to functional utility factors are normally made after the basic appraisal method. The appraiser assigns a value for the factor (heating and cooling, in the example) and adds that to the total value of the structure.
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