A large three-car detached garage is constructed on a homesite at a cost of $65,000. The appraiser researches the market and finds that this garage only adds $30,000 in value to the property. Which valuation principle does this demonstrate?

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31-05-2022
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A large three-car detached garage is constructed on a homesite at a cost of $65,000. The appraiser researches the market and finds that this garage only adds $30,000 in value to the property. Which valuation principle does this demonstrate?

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okpalawalter8 okpalawalter8 · Answer 1 · 2022-06-14T17:51:33+02:00

"A large three-car detached garage is constructed on a homesite at a cost of $65,000. The appraiser researches the market and finds that this garage only adds $30,000 in value to the property." The valuation principle does demonstrate is a contribution. This is further explained below.

What is contribution?

Generally, contribution is simply defined as the provision of something (as in money or effort) as a proportional share.

In conclusion, contribution is a major valuation principle.