What type of property typically uses the Cost Approach for valuation?

The Cost Approach is most appropriately applied to unique properties, such as special purpose buildings or new constructions, because this method estimates the value based on the cost to replace or reproduce the property with similar utility, adjusted for depreciation. Unique properties often do not have comparable sales or rental income data available, which makes other valuation approaches less effective. This approach is particularly useful for properties like schools, churches, or custom-built homes where there may not be a robust market for similar properties.

When considering the other options, while vacant land can be valued using the Cost Approach, it is often more effectively assessed through the Sales Comparison Approach. Single-family homes can sometimes be evaluated using this approach, but typically, comparable sales are more readily available, making the Sales Comparison Approach more common. Similarly, commercial office buildings usually benefit from the Income Approach due to the availability of income data and comparable sales, enhancing the accuracy of the valuation. Thus, the unique nature of the properties suited for the Cost Approach justifies its specific application.