HOW IS PROPERTY APPRAISED?
There are three approaches to value stipulated in the Florida Statutes: 1.)
"Direct Sales Comparison", 2.) "Replacement Cost", and 3.) "Capitalization of
Income". In Lee County, we use a computer assisted mass appraisal system that
incorporates elements of all three approaches to value. Please keep in mind,
however, that the best evidence of the fair market value is when several properties
similar to yours sell.
The property’s fair market value can be determined employing one or more
of three different methods.
The first method is to find properties like yours which have recently sold.
However, their selling prices must be analyzed very carefully to get the true
picture. One property may have sold for more than it was really worth because
the buyer was in a hurry to occupy it and would pay any price to get in. Another
may have sold for less than it was really worth because the owner needed cash
right away, so was willing to sell to the first buyer making an offer. The Property
Appraiser must always consider such over or under sales price to arrive at a
fair valuation of your property.
The second method is based on how much money it would take, at current material
and labor costs, to replace your property with one just like it. If any improvements
are not new, the amount of depreciation must also be determined.
The final method is used in addition to the other two if you own property
which does, or could, provide an income, such as an apartment complex, retail
store space, or office building. In that case, the Property Appraiser must consider
such dollar facts as your revenues, operating expenses, insurance, maintenance
costs, degree of financial risk incurred by owning the property, and finally,
the return most people would expect to receive on that kind of property.
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