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Questions and Answers
What is an example of an interim use?
What is an example of an interim use?
- A commercial building
- A recently constructed office complex
- A long-term residential lease
- A temporary parking lot (correct)
What happens when a property is changed to more restrictive zoning?
What happens when a property is changed to more restrictive zoning?
- The existing use is allowed to continue, but cannot be expanded (correct)
- The existing use can no longer continue
- The property must be sold immediately
- New uses must be in compliance with previous zoning
What is the purpose of the land residual method?
What is the purpose of the land residual method?
- To determine the total value of a property
- To estimate the income attributable to the land (correct)
- To calculate property taxes
- To assess the value of improvements on the property
Which method is utilized to estimate site value based on comparable sales?
Which method is utilized to estimate site value based on comparable sales?
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What does the extraction method aim to determine?
What does the extraction method aim to determine?
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Which statement about the allocation method is true?
Which statement about the allocation method is true?
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What is the basis of income approach appraisals?
What is the basis of income approach appraisals?
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Which factor is necessary when using the land residual method?
Which factor is necessary when using the land residual method?
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In the allocation method of site valuation, what is the key assumption made?
In the allocation method of site valuation, what is the key assumption made?
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What differentiates the extraction method from other valuation methods?
What differentiates the extraction method from other valuation methods?
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Which statement correctly describes the ground rent capitalization method?
Which statement correctly describes the ground rent capitalization method?
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What is the purpose of the allocation method in site valuation?
What is the purpose of the allocation method in site valuation?
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When is the extraction method utilized in real estate appraisal?
When is the extraction method utilized in real estate appraisal?
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What is a critical piece of information needed when applying the land residual method?
What is a critical piece of information needed when applying the land residual method?
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What type of income does an appraiser focus on in the income approach for buildings?
What type of income does an appraiser focus on in the income approach for buildings?
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In the context of zoning changes, what does it mean if an existing use is allowed to continue but cannot be expanded?
In the context of zoning changes, what does it mean if an existing use is allowed to continue but cannot be expanded?
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Study Notes
Site Valuation Key Concepts
- Interim use refers to a temporary use of a property until a more permanent use is established.
- Zoning changes may restrict existing use; existing uses can continue but expansion or rebuilding is prohibited.
Income Approach in Appraisal
- Appraisers can attribute income to buildings, deduct it to find income for land, and apply a capitalization rate to derive land value.
Sales Comparison Method
- Useful for site valuation when similar properties in the market are available for comparison.
Allocation Method
- Assumes a proportionate distribution of property value among various components.
Extraction Method
- Applied to extract land value from total property value by isolating the value of improvements.
Land Residual Method Essentials
- Requires total net income, value of improvements, and separate capitalization rates for land and buildings.
Ground Rent Capitalization Method
- Applicable only for unimproved properties, focusing on long-term leases where the tenant develops the land.
Site Valuation Key Concepts
- Interim use refers to a temporary use of a property until a more permanent use is established.
- Zoning changes may restrict existing use; existing uses can continue but expansion or rebuilding is prohibited.
Income Approach in Appraisal
- Appraisers can attribute income to buildings, deduct it to find income for land, and apply a capitalization rate to derive land value.
Sales Comparison Method
- Useful for site valuation when similar properties in the market are available for comparison.
Allocation Method
- Assumes a proportionate distribution of property value among various components.
Extraction Method
- Applied to extract land value from total property value by isolating the value of improvements.
Land Residual Method Essentials
- Requires total net income, value of improvements, and separate capitalization rates for land and buildings.
Ground Rent Capitalization Method
- Applicable only for unimproved properties, focusing on long-term leases where the tenant develops the land.
Site Valuation Key Concepts
- Interim use refers to a temporary use of a property until a more permanent use is established.
- Zoning changes may restrict existing use; existing uses can continue but expansion or rebuilding is prohibited.
Income Approach in Appraisal
- Appraisers can attribute income to buildings, deduct it to find income for land, and apply a capitalization rate to derive land value.
Sales Comparison Method
- Useful for site valuation when similar properties in the market are available for comparison.
Allocation Method
- Assumes a proportionate distribution of property value among various components.
Extraction Method
- Applied to extract land value from total property value by isolating the value of improvements.
Land Residual Method Essentials
- Requires total net income, value of improvements, and separate capitalization rates for land and buildings.
Ground Rent Capitalization Method
- Applicable only for unimproved properties, focusing on long-term leases where the tenant develops the land.
Site Valuation Key Concepts
- Interim use refers to a temporary use of a property until a more permanent use is established.
- Zoning changes may restrict existing use; existing uses can continue but expansion or rebuilding is prohibited.
Income Approach in Appraisal
- Appraisers can attribute income to buildings, deduct it to find income for land, and apply a capitalization rate to derive land value.
Sales Comparison Method
- Useful for site valuation when similar properties in the market are available for comparison.
Allocation Method
- Assumes a proportionate distribution of property value among various components.
Extraction Method
- Applied to extract land value from total property value by isolating the value of improvements.
Land Residual Method Essentials
- Requires total net income, value of improvements, and separate capitalization rates for land and buildings.
Ground Rent Capitalization Method
- Applicable only for unimproved properties, focusing on long-term leases where the tenant develops the land.
Site Valuation Key Concepts
- Interim use refers to a temporary use of a property until a more permanent use is established.
- Zoning changes may restrict existing use; existing uses can continue but expansion or rebuilding is prohibited.
Income Approach in Appraisal
- Appraisers can attribute income to buildings, deduct it to find income for land, and apply a capitalization rate to derive land value.
Sales Comparison Method
- Useful for site valuation when similar properties in the market are available for comparison.
Allocation Method
- Assumes a proportionate distribution of property value among various components.
Extraction Method
- Applied to extract land value from total property value by isolating the value of improvements.
Land Residual Method Essentials
- Requires total net income, value of improvements, and separate capitalization rates for land and buildings.
Ground Rent Capitalization Method
- Applicable only for unimproved properties, focusing on long-term leases where the tenant develops the land.
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Description
Explore key concepts and methods of site valuation, including interim use, income approach, and various valuation methods like sales comparison and extraction. This quiz will enhance your understanding of how property value is assessed in real estate.
