What is a 'land residual technique' in Delaware real estate appraisal?
Why An 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 Is Correct
Answer B: An 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
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
Key Property Valuation Terms in This Question
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Key Terms to Know
A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Math Concepts
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