Appraisal - Site Valuation Flashcards
1
Q
Land Value Method
A
G - Ground Rent CAP L - Land Residual Technique A - Allocation D - Development (Subdivision) E - Extraction S - Sales Comp
2
Q
Ground Rent Capitalization
A
Land Rent/CAP Rate
3
Q
Land Residual Technique
A
Land Income / land cap rate
Land Income = Property net income (NOI) - building net income
Land’s income approach
4
Q
Allocation
A
Sale $ x land ratio (land:improvement)
5
Q
Development (Subdivision)
A
Large tract divide to small parcel (rarely use)
a. Sale $ - development cost
b. Discount cash flow analysis
6
Q
Extraction
A
Sale $ - Depreciated Cost
7
Q
Sales Comparison
A
contributory value
8
Q
Value of land (example)
A
Cost New Improvement $ $675,000
NOI $33,000 (after improvement completed)
Building CAP = 4.15% Land CAP=3.33%
- Building income = $675,000 x 4.15% = $28,012.50
- Land income= $33,000 - $28,012.50 = 4987.50
- Land Value = $4,987.50 / 3.33% = $149,775
9
Q
Entrepreneur Profit
A
Final Value - Site Cost - Hard and Direct Cost
