Which method is used to estimate building costs based on original property costs?

The index method is used to estimate building costs by analyzing original property costs and adjusting them based on current market data. This method typically involves utilizing various cost indices that reflect changes in construction costs over time. By applying the index to the original property costs, an updated estimate can be derived that accurately reflects the current cost of construction.

This method is particularly useful because it allows for adjustments due to inflation, changes in labor costs, material costs, and other economic factors that influence building costs. As a result, the index method provides a reliable way to appraise real estate based on historical expenditures while accounting for contemporary market conditions.