Property Valuation
A land residual analysis in Pennsylvania appraisal is used to:
ADetermine the value of land by deducting the value of improvements from total value✓ Correct
BEstimate the cost of remediating contaminated land
CCalculate property tax assessments for vacant land
DDetermine the GRM for vacant lots
Explanation
Land residual analysis estimates land value by subtracting the value of improvements from the total property value. It is particularly useful when comparable vacant land sales are scarce.
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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.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Math Concepts
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