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Questions and Answers
What is the primary purpose of the residual valuation method?
What is the primary purpose of the residual valuation method?
- To account for the costs of developing a piece of land
- To estimate the value of a property after all costs and expenses are deducted (correct)
- To determine the profit required by the developer
- To calculate the total market value of a property after development
What is the term for the estimated value of a property after planned improvements or construction are completed?
What is the term for the estimated value of a property after planned improvements or construction are completed?
- Development Value (correct)
- Residual Valuation
- Gross Development Value (GDV)
- Residual Site Value
What is the total market value of a property once it has been fully developed or improved?
What is the total market value of a property once it has been fully developed or improved?
- Development Value
- Residual Valuation
- Residual Site Value
- Gross Development Value (GDV) (correct)
What is the value of a piece of land after accounting for the costs of developing it and the profit required by the developer?
What is the value of a piece of land after accounting for the costs of developing it and the profit required by the developer?
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What is the main difference between Gross Development Value (GDV) and Residual Site Value?
What is the main difference between Gross Development Value (GDV) and Residual Site Value?
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Study Notes
Residual Valuation
- Residual valuation is a method of calculating the value of a property by considering its expected value after all costs and expenses are deducted.
- It involves finding out how much a property is worth after paying for everything needed to develop or maintain it.
Development Value
- Development value is the estimated value of a property after planned improvements or construction are completed.
- It represents the value of a property once it has been fully developed or renovated.
Gross Development Value (GDV)
- Gross Development Value (GDV) is the total market value of a property once it has been fully developed or improved.
- It represents the total amount of money that can be sold for the developed property.
Residual Site Value
- Residual Site Value is the value of a piece of land after accounting for the costs of developing it and the profit required by the developer.
- It represents how much a piece of land is worth after subtracting the costs to build on it and the developer's profit.
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