In NC, the 'highest and best use' of a property is defined as the:
Why Legally permissible, physically possible, financially feasible, and maximally productive use Is Correct
Answer B: Legally permissible, physically possible, financially feasible, and maximally productive use
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
Key Property Valuation Terms in This Question
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Related North Carolina Questions
- Highest and best use is defined as the use that is:Property Valuation
- A property generates $18,000 annual net operating income and the market cap rate is 6%. What is the indicated value?Property Valuation
- Highest and best use in appraisal is defined as the use that is:Property Valuation
- Market value in a real estate appraisal assumes all of the following EXCEPT:Property Valuation
Key Terms to Know
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
ZoningLocal government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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