Property Valuation
In a Massachusetts subdivision, the value contribution of the site improvements (streets, utilities, landscaping) is analyzed in the:
ALand residual technique
BBuilding residual technique
CSubdivision development analysis/land development method✓ Correct
DIncome capitalization
Explanation
The subdivision development analysis (land development method) is used to value land being developed for a subdivision, accounting for all development costs, absorption period, and profit to arrive at the current value of the raw land.
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Key Terms to Know
Capitalization Rate (Cap Rate)
A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Math Concepts
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