highest and best use of land
By Roche Realty Group. Highest and best use of a property is an economic concept that measures the interaction of four criteria.
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When analyzing vacant land the amount of.
. In a real sense the definition of highest and best use encompasses four tests. 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. 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.
Well help you determine exactly what will be the most profitable for you in the long run. The first two tests are interchangeable in order and in many circumstances the last two are combined. I hate this term.
Highest and best use is the reasonably probable use of property that results in the highest value. This use must be legally permissible physically possible financially feasible and maximally productive Conducting a Highest and Best Use Analysis. Roche Realty Group Blog.
Highest and Best Use Example. Regardless of property type the approach to determine highest and best use is the same. The four tests of highest and best use are.
According to The Uniform Standards of Professional Appraisal Practice 2002 highest and best use is defined as 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 standard used to evaluate and measure land use and commercial development has always been What is the highest and best use of the site. Steps Three and Four financially feasiblemost profitable cannot be determined until the first two.
Typically when we think of transitional land we think of an agricultural property whose highest and. The use must add more value than it costs to implement. The use must be consistent with the site characteristics and physical features of the property.
But rather it is a use shaped by the competitive forces within the market where the property is located. That reasonably 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 12342. 1 legally permissible 2 physically possible 3 financially feasible and 4 most profitable.
The four criteria the highest and best use must meet are. Whether the land is residential or farmland you have to recognize what the trends are going to be Often the highest and best use involves transitioning the land from its current useas a family farm for exampleto a commercial use such. Jim also explained how the particular use that the lands value is based on must.
The highest and best use is always one of the key factors you have to employ McGinnis says. What makes transitional land a unique area of real estate brokerage is the fact that the ultimate use of the property might not be easily recognized. So before you lock yourself into commercial development be sure to consider residential highest and best use for the land as well.
In fact the very nature of transitional land is that the highest and best use is dynamic. If you need help finding land or determining the highest and best us give us a call at 602-492-9242 or visit us online. Valuation of Land Commercial Development.
The Appraisal Institute defines highest and best use as follows. The highest and best use of a property must be one that is. To me it proposes two potentially opposite.
The use must comply with laws regulations and ordinances.
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