Property Valuation
A property that would sell for more in pieces than as a whole exhibits:
APlottage increment
BHighest and best use as improved
CRegression
DValue through subdivision potential✓ Correct
Explanation
A property worth more subdivided and sold in pieces than as a whole has value through its subdivision potential. This is the opposite of assemblage/plottage, where combining parcels creates additional value.
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Key Terms to Know
Comparable Sales (Comps)
Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
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.
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