RCA (replacement cost analysis)

An RCA or replacement cost analysis is performed by calculating how much it would cost to build a certain property at current rates in order to determine the property’s current value. For instance if a property was bought 20 years ago for R350 000 and an RCA was performed today taking into account all the variables such as size etc; it may show that the property is now worth over R1.5 million because of the increase in building costs and materials.