Property Valuation
In South Dakota, what does 'site value' mean in an appraisal?
AThe value of the property's improvements only
BThe value of the land as if vacant and available for its highest and best use✓ Correct
CThe assessed value for tax purposes
DThe replacement cost of the site improvements (grading, utilities)
Explanation
Site value in appraisal refers to the value of the land component as if it were vacant and ready for development to its highest and best use. In the cost approach, site value is estimated separately from the improvements.
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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.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Math Concepts
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