Property Valuation
What is a 'land residual technique' in Delaware real estate appraisal?
AEstimating the remaining land value after buildings are demolished
BAn income approach technique that estimates land value by capitalizing the residual income attributable to the land after accounting for the return on and of improvements✓ Correct
CCalculating the value of a remaining strip of land after a partial taking
DEstimating land value from residual comparable sales data
Explanation
The land residual technique estimates land value within the income approach: (1) calculate the return required on improvements (Improvement Value × Required Rate); (2) subtract from total NOI to get land residual income; (3) capitalize land income (Land Income ÷ Land Cap Rate = Land Value). Used when land value is unknown but building value is known (e.
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