Property Valuation
The principle of 'highest and best use' requires that it be:
AThe use currently in place on the property
BLegally permissible, physically possible, financially feasible, and maximally productive✓ Correct
CThe most expensive possible use of the land
DThe use preferred by the local zoning board
Explanation
Highest and best use is defined as the reasonably probable use that is legally permissible, physically possible, financially feasible, and that produces the highest present value for the property.
People Also Study
Related Connecticut Questions
- The highest and best use of a property is defined as the use that is:Property Valuation
- The principle that value is created and maintained when a property's use is consistent with surrounding uses is called:Property Valuation
- Which appraisal principle states that the value of a property is affected by the values of neighboring properties?Property Valuation
- Which principle of value states that the value added by any component of a property should be measured by what it contributes to the whole?Property Valuation
Key Terms to Know
Zoning
Local government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Study This Topic
Practice More Connecticut Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Connecticut Quiz →