Which cost approach concept generally becomes harder to calculate as a building ages?

The concept that generally becomes harder to calculate as a building ages is depreciation. Depreciation refers to the reduction in value of an asset over time due to factors like wear and tear, outdated features, and obsolescence. As a building ages, accurately assessing the extent of depreciation becomes more complex because the physical condition and economic relevance of the property can change in unpredictable ways.

For older buildings, specific types of depreciation such as functional obsolescence or economic obsolescence may need to be analyzed in-depth, which requires significant judgment and knowledge of the current market conditions and trends. Appraisers must estimate how these factors affect the building's value over time, making it increasingly challenging as maintenance, repair history, and market relevance become less clear with age.

In contrast, while land value determination, replacement costs, and gross revenue estimation are important concepts in the cost approach and can also be influenced by various factors, they do not present the same level of complexity in relation to aging. Land value often remains relatively stable, replacement costs can be assessed with current construction prices, and gross revenue can be estimated through current market data without the same complications caused by aging.