Dictionary of Real Estate Terms: unit-in-place method
unit-in-place method
a technique used by appraisers to estimate the reproduction cost (new) of a structure. The method involves estimating the cost of producing and installing individual components, such as the foundation, exterior walls, and plumbing. Similar methods include the trade-breakdown method and segregatedcosts method.
Example: A simplified cost estimate using the unit-in-place method is shown in Table 55.
| TABLE 55 | ||
| UNIT-IN-PLACE METHOD | ||
| Item | Cost per unit ($/ft²) | Cost |
| Foundation 1500 fts² | 2 | $3,000 |
| Walls 1600 ft² | 4 | 6,400 |
| Roof 1500 ft² | 3 | 4,500 |
| Flooring 1500 ft² | 2 | 3,000 |
| Plumbing | 2,500 | |
| Heating | 1,500 | |
| Electrical | 2,000 | |
| Total | $22,900 | |
| Fees, interest and overhead (10%) | 2,290 | |
| Reproduction cost (new) | $25,190 |
