Property Valuation
The 'land to building value' ratio is important in Indiana commercial appraisal because:
AIt determines the property tax allocation
BIt helps identify over-improvement or under-improvement of a site relative to comparable properties, affecting value conclusions✓ Correct
CIt sets the depreciation rate
DIt determines the cap rate
Explanation
The land-to-improvement ratio helps appraisers identify whether a property is over-improved (too much building for the land value) or under-improved (too little building), both of which can affect value through the principles of conformity and contribution.
Related Indiana Property Valuation Questions
- The 'principle of substitution' in appraisal states that:
- An Indiana appraisal for an estate tax purpose (date of death value) uses which effective date?
- Highest and best use is defined as the use that is:
- An Indiana appraiser's opinion of value is an estimate of:
- Economic life of an improvement refers to:
- An Indianapolis apartment building generates a NOI of $72,000 per year. If comparable properties have a cap rate of 7.5%, what is the estimated value?
- The cost approach to valuation uses the formula:
- In Indiana, the Uniform Residential Appraisal Report (URAR) form is used to appraise:
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