Which appraisal approach is typically most appropriate for special purpose properties?

The cost approach is typically the most appropriate appraisal method for special purpose properties because it focuses on the value of the land and the cost of constructing a replacement or reproduction of the structure. Special purpose properties, such as schools, churches, or hospitals, may not have a comparable market for sales or rentals, making the market approach less effective. In these cases, the income approach may also be less relevant, especially if the property does not generate significant income or is not operated for profit.

By utilizing the cost approach, appraisers can determine the value of the property by calculating the cost to build a similar property while accounting for depreciation and other economic factors. This method offers a reliable means of valuing properties that have unique characteristics or purposes that do not conform to typical market valuation methods. Thus, the cost approach is particularly suited for special purpose properties where traditional comparables might not be available.