Replacement Cost Estimate

Estimated cost to rebuild the structure at current construction costs.

Example Result

Sample Data

$225,000

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

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Replacement Cost Estimate Formula

Square Footage x $150/sqft

1,500.00 x $150/sqft

$225,000

What This Means

A sample property priced at $385,000 with $2,850/month rent has a replacement cost estimate of $225,000 at Purchase (Month 0). Buying below replacement cost is a built-in margin of safety. If it costs $300K to build and you buy for $250K, a developer cannot compete with you on price, which protects your investment.

Where This Value Comes From

Replacement Cost Estimate is not entered directly — it is calculated from Square Footage. See the formula breakdown above and the detailed inputs below.

Inputs That Determine Replacement Cost Estimate

Square Footage

The total livable square footage of the property.

Found on your county records

1,500.00

Purchase

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Why It Matters

Buying below replacement cost is a built-in margin of safety. If it costs $300K to build and you buy for $250K, a developer cannot compete with you on price, which protects your investment.

Detailed Explanation

The Replacement Cost Estimate calculates what it would cost to rebuild the structure from scratch at current construction costs (estimated at $150/sqft). This excludes land value.