Which of the approaches to value is generally considered to be the most difficult when appraising existing hotels?
A)direct capitalization approach
B)sales comparison approach
C)yield capitalization approach
D)cost approach

Question

Quizplus · Accepted Answer

The cost approach is generally considered to be the most difficult when appraising existing hotels because it requires a detailed analysis of the replacement cost of the property, including its physical condition, functional obsolescence, and external factors such as zoning regulations and construction costs. It also requires a thorough understanding of the market conditions and the demand for the property in question. In contrast, the other approaches (direct capitalization, sales comparison, and yield capitalization) are based on the income potential of the property and rely on market data and comparable sales to determine value.

Which of the Approaches to Value Is Generally Considered to Be