Which method estimates the cost of constructing a building by applying a cost per square foot to the building's size?

• A. Cost Approach Method
• B. Income Approach
• C. Square Foot Method
• D. Replacement Cost Method

Answer: (C)

Estimating construction cost by applying a cost per square foot to the building’s size is using the square foot method. This approach multiplies the building’s area (in square feet) by a unit cost derived from current prices to produce a quick, rough estimate of what it would cost to build. It’s handy for early budgeting, feasibility checks, or initial appraisals because it’s straightforward and fast. However, it’s less precise because it doesn’t account for design complexity, material choices, labor conditions, site factors, or specific construction details. Other approaches, such as the broader replacement cost method or the cost approach that also factors land value and depreciation, involve more detailed inputs and considerations; the income approach, meanwhile, estimates value based on potential income rather than construction cost. So the method described is the square foot method.