Property Valuation
A Wyoming industrial property appraiser uses the 'extraction method' to value the land. This involves:
AExtracting mineral values from the property value
BSubtracting the estimated depreciated value of improvements from the total property value to isolate land value✓ Correct
CComparing vacant industrial land sales directly
DExtracting income attributable to land from the capitalization of income approach
Explanation
The extraction (abstraction) method estimates land value by subtracting the estimated depreciated value of improvements from the total sale price of a comparable property. The residual is attributed to the land value.
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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.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
AppraisalA 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.
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