highest and best use of a property is that use which
The principal of highest and best use evaluates a piece of property with four different tests to determine its maximum financial productivity. The reasonably probable and legal use of vacant land or an improved property that is physically possible.
The Concept Of Highest And Best Use In Property Development The Concept Of Highest And Best Use In Studocu
The Appraisal Institute defines highest and best use as follows.
. The Appraisal Institute defines highest and best use as follows. By way of example think of a situation where the appraiser for the government contends that the highest and best use of the property is for agricultural development ie. The highest and best use of a property is the use of a property that would create the greatest net return over time.
The reasonably probable and legal use of property that is physically possible appropriately supported and financially feasible and that results in the highest value. The fair value can be higher than the present associated value if the same property is used for some other purpose and hence can fetch a higher rate at the time of buying and. Highest and Best Use Will Likely be Different.
As a residential asset the entire property before partial condemnation had appraised at 140000 whereas the land as a commercial site was worth double that amount. If the use is temporary it would then be considered the interim use. This two-day course provides students with the tools needed to make a highest and best use decision utilizing the three approaches to value through its relationship.
Sometimes highest and best use is referred to on the real estate. 1 Is Any Other Use Physically Possible. This is one of the most.
In many situations the highest and best use of a piece of property will probably not change due to the stability age and maturity of the neighbourhood. Highest and Best Use is a term used in accounting and finance. When determining what use would constitute the highest and best use the appraiser needs to consider many possible uses.
In evaluating the highest and best use of the property we have to consider all the different features of property being partitioned. The determination of this value is vital for analysing and assessing the value of a property. OConnor Associates staff complement of over 50 real estate professionals includes 12-15 senior staff member who can complete an expedited highest and best use analysis for your.
The reasonably probable and legal use of vacant land or an improved property that is physically possible appropriately. Conceptually highest and best use is a test used by appraisers to determine if a propertys current or intended use finds that productmarket fit. The market value would be 225000 250000 site value minus 25000 demolition cost.
The highest and best use of the site is to demolish the house and sell the site as a commercial lot. The highest and best use of a specific parcel of land is not determined through subjective analysis by a property owner developer real estate agent or appraiser. There are usually four determinants for highest and best use of a commercial property which are listed below.
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