Property Valuation
In Montana, 'site value' in an appraisal refers to:
AThe total value of the improvements on the land
BThe value of the land alone, as if vacant and available to be developed to its highest and best use✓ Correct
CThe assessed value of the land only for tax purposes
DThe cost to prepare the site for construction
Explanation
Site value (land value) is the value of the land alone, unimproved, as if available for its highest and best use. It is estimated separately from the improvement value in the cost approach and as a component of income approach analysis.
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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.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Math Concepts
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