According to the Cost Approach Procedure, what is calculated after determining the estimated reproduction cost of improvements?

In the Cost Approach Procedure, after determining the estimated reproduction cost of improvements, the next step involves calculating the estimated accrued depreciation. This is crucial because it reflects the loss of value from the property due to factors such as wear and tear, age, and external influences. Accrued depreciation is essential for arriving at an accurate valuation of the property, as it helps to adjust the reproduction cost to reflect the current market value.

Determining accrued depreciation allows appraisers to account for the differences between the cost of constructing the building anew and its current market value. By incorporating this depreciation into the valuation process, stakeholders can gain a more realistic understanding of the property’s worth at a given time, which is particularly important for investment decisions or sale purposes.

The other options do not directly pertain to this specific step in the Cost Approach. For example, marketability of the property and potential rental income involve factors beyond the cost and condition of physical improvements, and future maintenance costs are considerations that might affect overall financial forecasting but come into play after determining current value rather than in immediate relation to the cost approach itself.