Do you appraise billboards based on Income and Sales Comparison approaches or based on the Replacement Cost New Less Depreciation (RCNLD)?
We appraise billboards based on their market value. This includes an analysis of the structure and its Replacement Cost New Less Depreciation. However, this is not the only approach used by buyers and sellers to estimate market value. Market value is defined by The Appraisal of Real Estate, 10th ed., as “The most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress.” Billboards and the property rights associated with them are typically sold in competitive markets for cash or cash equivalent prices, with both buyers and sellers acting in their self-interest. These sales can be used to adequately estimate the market value of a billboard as well.
