Which approach is used when valuing special purpose properties like schools or churches?

The cost approach is the most suitable method for valuing special purpose properties such as schools and churches. This approach is based on the principle that the value of a property is fundamentally linked to the cost of constructing a similar property. For unique or specialized properties that may not be frequently sold in the market, there often isn't sufficient comparable sales data available to effectively employ the sales comparison approach.

The cost approach entails estimating the cost to replace or reproduce the property's improvements, minus any depreciation, and then adding the value of the land. This makes it particularly useful for properties that do not typically generate income, like schools and churches, as these properties often have very specialized uses and cannot be easily compared to other transactional properties.

This method also allows appraisers to account for the specific characteristics that define these properties, such as their construction quality and unique design features, which are essential in determining their value. Therefore, using the cost approach provides a comprehensive and logical framework for arriving at an accurate valuation for special purpose properties.