Property Valuation
In Michigan, the 'abstraction method' (allocation method) of land valuation involves:
AInterviewing local developers for land value opinions
BSubtracting the depreciated value of improvements from the total property value to arrive at land value✓ Correct
CCapitalizing land rent into a land value
DComparing raw land sales only
Explanation
The abstraction (allocation) method estimates land value by subtracting the depreciated cost of improvements from the total property sale price, arriving at the implied land value. It is used when direct land sales are scarce.
Related Michigan Property Valuation Questions
- When a Michigan appraiser finds a 'negative adjustment' is needed for a comparable sale, it means the comparable is:
- In Michigan, an 'automated valuation model' (AVM) is:
- A property generates a net operating income (NOI) of $45,000 annually. Using a capitalization rate of 7.5%, what is the estimated value?
- In Michigan, capitalization rate (cap rate) is calculated as:
- Michigan's Principal Residence Exemption (PRE) from certain school taxes requires:
- In Michigan, 'assessed value' for property tax purposes is typically set at what percentage of market value?
- A Michigan home is appraised using the GRM method. Monthly rent is $1,500 and the GRM for comparable properties is 140. What is the estimated value?
- The income capitalization approach is most commonly used to appraise:
Practice More Michigan Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Michigan Quiz →