What is an important feature of a cost manual?

A cost manual is a critical tool in the appraisal process, as it provides standardized data to guide valuation. One significant feature of a cost manual is its inclusion of indirect costs and the fact that it is often computerized. Indirect costs are expenses not directly tied to a specific project but necessary for the overall operation, such as utilities and administrative expenses, which can significantly influence the total cost of construction or renovation.

Being computerized enhances the functionality and accessibility of the cost manual, allowing for quicker data retrieval, updates, and analysis. This digitization ensures that appraisers can easily calculate and adjust values based on the most current and relevant data, making the appraisal process more efficient and reliable.

While market analysis is important, it is typically found in various other appraisal documents rather than being a central feature of a cost manual. Similarly, while appraisers certainly calculate values based on information in a cost manual, the manual itself does not inherently contain the calculations performed by the appraisers. Lastly, a cost manual utilizes a broader set of data, including both historical and indirect costs, rather than focusing solely on historical cost data.