Property Valuation
An Indiana appraiser who determines the highest and best use 'as if vacant' is asking:
AWhat is the property worth with no improvements?
BWhat would be the most productive use of the land if it were vacant and available for development?✓ Correct
CWhat would the property sell for unfurnished?
DWhat is the land worth after demolishing the improvements?
Explanation
Highest and best use 'as if vacant' asks what the ideal use and development of the land would be if there were no existing improvements. This establishes the baseline for evaluating whether the existing improvements contribute to or detract from value.
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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.
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.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
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