Highest And Best Use Analysis

Converting the property into office space results in a value of 1 485 848. What the ideal improvement would be and the property as currently improved.

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In the analysis of pertinent data four steps are implicit and are applied in the following order to develop adequate support for the appraiser s highest and best use opinion.

Highest and best use analysis. The concept of highest and best use was popularized by economists irving fisher. A highest and best use analysis can be either completed within an appraisal or as a stand alone assignment. Highest and best use the highest and best use of a property refers to the reasonably probable and legal use of vacant land or an improved property that is physically possible appropriately supported and financially feasible and that.

Why is the highest and best use so important in the appraisal process. In any appraisal assignment the importance of identifying the appraisal problem will determine the scope of work. The vacant property is valued at 150 000.

Giving them proper thought will provide accurate insight into the most profitable use of the subject real estate. In this post on highest and best use analysis we will focus only on real estate although this concept can be applied many other assets. Next is the land value opinion.

Highest and best use analysis by philip g. Application of the approaches to value. 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 highest and best use of the property is determined afterwards. Highest and best use analysis produces the highest value for a property based on the concept of maximum productivity. Continuing to use the property for retail space yields an estimated value of 1 402 222.

Regardless of the property s projected use these are critical questions to consider when appraising a new structure or lot. As market marketability analysis progresses to highest and best use analysis appraisers first consider the reasonably probable uses of a site that can be legally undertaken. Most appraisers agree that the highest and best use analysis is an integral component of their toolkit.

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 analysis evaluates each potential use of the property and its corresponding value. Reconciliation of the valuation approaches as well as a final opinion of.

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. The land was classified. Data analysis includes the market analysis as well as the highest and best use analysis considering the land as vacant.

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