Property Valuation
The 'land-to-improvement ratio' in Texas property valuation helps appraisers:
ADetermine the property tax rate
BIdentify properties where the land value represents an unusually high or low proportion of total value, which may affect highest and best use analysis✓ Correct
CCalculate the cost of building materials
DSet the listing price for raw land
Explanation
The land-to-improvement ratio shows what percentage of total property value is attributable to the land vs. the improvements. A high land ratio may suggest that the improvements are underutilizing the site's potential value, indicating possible demolition/redevelopment as highest and best use.
Related Texas Property Valuation Questions
- An appraiser in Houston performing an appraisal on a property located in a rapidly gentrifying neighborhood should give the most weight to:
- An appraiser valuing a Texas property uses three approaches and reconciles to a final value. The cost approach gives $310,000, the sales comparison approach gives $295,000, and the income approach gives $285,000 (it's a home that is sometimes rented). The appraiser should give the MOST weight to:
- The effective age of a building is:
- A Texas appraiser values a property and determines that the highest and best use differs from the current use. This could result in:
- A property recently sold for $350,000. The buyer paid $5,000 above appraised value due to a competitive bidding situation. For comparable sales purposes, the appraiser would most likely:
- In Texas commercial real estate, a 'cap rate expansion' (rising cap rates) typically indicates:
- Functional obsolescence in a property refers to:
- External obsolescence affecting a Texas property is BEST described as:
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