highest and best use of land
According to the Appraisal Institute the definition for highest and best use is the reasonably probable and legal use of vacant land or. As part of data analysis the information that is truly relevant to the assignment will then undergo _____ and will be subjected to.
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The four criteria the highest and best use must meet are.
. HB Use is defined as. The legal use of land or improved property which at any. Highest Best Use - Market Value - Land 1-Mile Major Thoroughfare Single Family Apartments Single Family Office Complex Apartments Present Value of 16 11 for 6 years 855 for convenience store Current Value for Fast Food 10 Thus value is.
Definition of Highest and Best Use in Real Estate. The reasonably probable and legal use of vacant land or an improved property that is physically possible appropriately supported financially feasible and that results in the highest value. In my opinion the use that generates the highest net present value is the highest and best use because it takes into account both the time value of money and the cost of capital.
Only those uses which produce a _____ are considered for the final test of maximum productivity. The reasonable probable and legal use of vacant land or an improved property which is physically possible appropriately supported financially feasible and that results in the highest value. The Appraisal Institute defines highest and best use as follows.
If potential uses for the intended property satisfy the first two tests the land is subjected to a financial feasibility test. If the owner wants to pay that for its current use thats fine. Just remember that properties with five or more units are considered commercial property.
The highest and best use of that land might be retail or commercial. In some situations its easy for a. 2027783101 1717 K STREET NW STE.
The zoning requirements as well as the expectations of. The Four Tests of Highest and Best Use 1. The cost of demolition may not be recovered in the value of the future vacant land.
The highest and best use analysis concept is a form of real estate appraisal that considers not only the best use of the property but any potential use or gains that may come from future ventures. The reasonably probable and legal use of vacant land or an improved property that is physically possible appropriately supported financially feasible and that results in the highest value. The reasonably probable use of property that results in the highest value.
If the highest and best use of your land isnt commercial use what else can you do with it. When analyzing vacant land the amount of. The development of a vacant land area is _____ the highest and best use of the land.
HIGHEST AND BEST USE ANALYSIS AND LAND VALUE OPTIMIATION STUDIES DELTA ASSOCIATES P. Highest and Best Use is the likely use selected from a number of available choices to which an area of land or a building may be put based on what is physically possible and in compliance with zoning and building regulations and which at the time of an appraisal produces the most profitable present value of the land. Highest and Best Use or highest or best use HBU is a concept that originated with early economists such as Irving Fisher 1867-1947 who conceptualized the idea of maximum productivity.
The broad principles used in the identification and valuation of excess land are similar for either residential or commercial properties. The use must be consistent with the site characteristics and physical features of the property. The definition of highest and best use is as follows.
The Appraisal Institute has. You must consider the size shape topography and accessibility of the site when determining if. Thats a pretty easy concept.
Regardless of property type the approach to determine highest and best use is the same. The four criteria the highest and best use must meet are legal permissibility physical possibility financial feasibility and maximum productivity. The Fifth Edition of The Dictionary of Real Estate Appraisal by the Appraisal Institute defines highest and best use as.
The highest and best use of the excess land may or may not be the same as the highest and best use of the improved parcel. The use must add more value than it costs to implement. I think everybody agrees with that.
Highest return can mean different thing to different people Internal Rate of Return Net Present Value development profit or residual land value. Although improved property is generally more valuable than vacant land the assumed highest and best use of the land may mean clearing away existing structures. Excess land has the potential to be sold separately.
The concept of highest and best use is one of the fundamental principles that underlie real estate appraisal. Consider residential buildings and development instead. If a developer offers 1 millionacre a year in ground rent and the owner of a surface parking lot is only paying 73000 in property tax for a 3 acre parcel by the waterfront the highest and best use would be whatever pays 300000 a year.
1010 WASHINGTON DC 20006 WWWDELTAASSOCIATESCOM INFODELTAASSOCIATESCOM. Terms in this set 32 the highest and best use of a property must be one that is. Alternatively the probable use of land or improved property specific with respect to the user and timing of the use that is adequately supported and results in the highest present value.
Instead of commercial you can consider building single-family detached residential homes condos or townhomes. One of the earliest citations of the term is found in the Minutes of the Maine Legislature as early as 1831 in speaking about the assessment and valuation of real estate. HIGHEST AND BEST USE.
The four criteria that the highest and best use must meet are legal permissibility physical possibility financial feasibility and maximum productivity. When a site contains improvements the highest and best use may be determined to be different from the existing use. Highest and best use can be defined as the reasonable probable and legal use of vacant land or an improved property which is physically possible appropriately supported financially feasible and that results in the highest value.
The use must comply with laws regulations and ordinances. This concept or theory has been around for a long time. You must consider whether any zoning issues or restrictions will prevent building on or.
Also if you have some property that has pipelines or maybe multiple pipelines on it your propertys highest and best use could be as a pipeline corridor. Highest and best use requires that the appraisal considers not just the current use of the property but also the potential value associated with alternative uses. Referred to as highest and best use analysis four analytical tests are key to a decision.
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