In the context of property valuation, MV= LV+BV represents a basic model structure for which approach?

The equation MV = LV + BV is indicative of the Cost Approach to property valuation. In this formula, MV stands for Market Value, LV represents Land Value, and BV signifies Building Value. This approach is based on the premise that a property's value can be determined by adding the value of the land to the value of the improvements (buildings and structures) on that land.

The Cost Approach is particularly useful in situations where properties are not frequently bought and sold, such as unique properties or new construction. By breaking down the value into its components, assessors can arrive at a market value that reflects the current cost to replace the improvements, which can then be compared to the land value. This method allows for a systematic and structured way to assess properties, focusing on tangible costs rather than solely on market dynamics or income potential.