3 Approaches to Value
There are three ways to determine the value of anything, and each plays a part in property appraisal.
The sales comparison approach. This opinion of value is based on what similar propertys recently sold for, taking with adjustments for time, acreage, living areas, etc. This is the job of your trained appraiser.
The cost approach. Basically, this is the amount it would cost to rebuild the property, less depreciation, etc.
The income approach. The rental income an owner might reasonably expect from a property is part of its value.