Three Approaches to Value

Determining the value of a physical property—whether a classic Brooklyn brownstone, a specialized hospital in Queens, or a vacant parcel in the Hudson Valley—requires translating physical utility and human behavior into a concrete financial figure. Value is not an inherent property of brick, steel, or earth; it is an emergent metric dictated by market alternatives, construction economics, and future revenue potential. In professional real estate appraisal, this translation is executed through three fundamental methodologies: the three primary approaches to real estate valuation are the sales comparison approach, the cost approach, and the income approach. By mastering these frameworks, a real estate professional stops guessing at market trends and begins to mathematically deconstruct exactly what a property is worth and, more importantly, why.