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In appraising condominiums, one accurate appraisal <br /> method would be the use of the cost approach tempered with <br /> available and relevant market data. For numerous reasons, <br /> the location of a property has long been recognized as the <br /> single most important factor in determination of its value. <br /> The consideration of location in condominium valuation is <br /> equally important, although less discernible in the cost <br /> approach since all of the units occupy the same land <br /> proportionately. The ratios for common interest alone would <br /> not be an adequate indication of locational advantage as the <br /> division is often based solely on unit areas. Application <br /> of the cost approach shall reflect the necessary <br /> consideration of market factors. <br /> The Income Approach: <br /> Although the capitalization of income expectancy in <br /> areas where adequate rental units of similar design are <br /> available would provide a value indication, many adjustments <br /> would probably be necessary to compensate for differences in <br /> construction (such as soundproofing) unit location and other <br /> factors. Except in the larger urban communities, this <br /> method would provide little benefit to the appraiser, <br /> without extensive research for which compensating benefits <br /> in accuracy may not result. In summary, data necessary for <br /> the income approach may be hard to find and unreliable (if <br /> not refined) when secured, but when readily available and <br /> accurate, it should be carefully considered in the tax <br /> valuation. <br /> The Market Data Approach: <br /> Being generally accepted as the best indication of <br /> market value, where adequate data exists, this approach is <br /> also most appropriate for the valuation of condominiums. <br /> When sufficient data exists, the neighborhood area may <br /> be defined as the total condominium project and location of <br /> the individual units within the project would be of primary <br /> concern. Initially a unit with an unattractive view could <br /> be valued the same as one with an exceptionally desirable <br /> vantage. It is here that the cost valuation must be <br /> adjusted by adequate market data in order to produce <br /> equitable results. <br /> In comparing the sale price of the condominium unit <br /> with the price for other residential properties and in turn <br /> analyzing the market classification for the other properties <br /> compared, the building value class for the condominium units <br /> may be easily determined. This procedure might serve useful <br /> in the early stages of completion and the offering price for <br />