Property Valuation
What is a land residual analysis and how is it used in Nevada real estate?
AAn analysis of residual soil contamination on a parcel
BA technique to estimate land value by subtracting the value attributable to improvements from the total property value, used when improvements are new and their value is well-established✓ Correct
CA technique for valuing the remaining term of a long-term lease
DAn analysis of residual BLM land available for purchase
Explanation
The land residual technique estimates land value by: (1) determining total property value by capitalizing total income, (2) calculating income attributable to improvements (based on their replacement cost), (3) subtracting improvement income from total income to get land income, and (4) capitalizing land income to get land value.
People Also Study
Related Nevada Questions
- A Nevada property has a replacement cost of $300,000 for improvements and 20% depreciation. If the land is worth $80,000, what is the cost approach value?Property Valuation
- An appraiser performing a cost approach appraisal on a 15-year-old commercial building in Reno, Nevada estimates the building reproduction cost at $1,200,000 and the land value at $300,000. With an effective age of 15 years and economic life of 50 years, what is the estimated depreciation?Property Valuation
- What is the land residual technique in Nevada commercial appraisal?Property Valuation
- What is a residual technique for estimating building value in Nevada appraisal?Property Valuation
- A Nevada property has a monthly gross income of $2,800. Using a Gross Rent Multiplier of 110, what is the estimated property value?Real Estate Math
- A Nevada property has annual gross income of $48,000 and a GRM of 95 (monthly). What is the estimated property value?Real Estate Math
- Which government survey system is used in Nevada to describe land?Property Ownership
- A Nevada borrower defaults on their deed of trust. Which foreclosure process is most commonly used?Finance
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.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Study This Topic
Practice More Nevada Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Nevada Quiz →