Property Valuation
The principle of 'highest and best use' in Florida appraisal is defined as the use that is:
AThe most intensive use allowed by zoning
BLegally permissible, physically possible, financially feasible, and maximally productive✓ Correct
CPreferred by the property owner
DThe use that generates the highest gross income
Explanation
Highest and best use is the most profitable, legally permissible, physically possible, and financially feasible use of a property. It is the foundation of market value estimation in all appraisal approaches.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
ZoningLocal government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.
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.
Math Concepts
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