Which methodological approach is most practical for valuing unique properties?

The cost approach is particularly effective for valuing unique properties because it focuses on estimating the value of a property based on the costs associated with replicating or replacing it. This method is especially relevant for properties that do not have comparable sales data available, which is often the case for unique or specialized properties. By assessing the cost to construct a similar property minus any depreciation, the cost approach provides a clear framework to determine the value of a unique asset.

In instances where a property has few or no direct comparables, such as custom-built homes, specialized commercial buildings, or properties with historical significance, the cost approach allows appraisers to consider the specific features and construction costs that add to the property's value. This focus on tangible costs rather than market forces or income potential positions the cost approach as the most practical choice for unique properties. Other approaches may rely significantly on comparable market data or income projections, which may not be applicable for distinct properties.