20D - AA VACANT LAND PURCHASE - Laserfiche WebLink

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VALUATION ANALYSIS (Continued) HIGHEST AND BEST USE ANALYIS: (Continued) Financially Feasible: (Continued) and best use of the subject site, as if vacant, is residential development in accordance with standards set forth in the current zone classification. VALUATION METHODS: There are three conventional methods (approaches) which can be used to estimate value. They are the Sales Comparison Approach, Cost -Summation Approach, and Income Capitalization Approach. Following is a brief description of each approach to value. Sales Comparison Approach: This approach consists of the investigation of recent sales of similar properties to determine the price at which said properties sold. The information so gathered is judged and considered by the appraiser as to its comparability to the subject property. Recent comparable sales, either vacant land or improved properties, are the basis for the application of the Sales Comparison Approach. Cost -Summation Approach: The Cost -Summation Approach consists of estimating the construction cost new of the building and yard improvements and making allowances for the appropriate amount of accrued depreciation. The depreciated reconstruction value of the improvements is then added to the land value estimate. The sum of these two figures is the value indicated by the Cost - Summation Approach. Income Capitalization Approach: The Income Capitalization Approach consists of the capitalizing of net income of the property under appraisement. The capitalization methodology studies the income stream, allows for (1) vacancy and credit loss, (2) fixed expenses, and (3) oper- ating expenses. The value indicated by the Income Capitalization Approach represents the money which would be paid by a prudent investor to obtain the net income capable of being generated by the property. The capitalization rate is usually commensurate with the inherent risk. T GARDANDASSOCIATES APPRAISERS -CONSULTANTS 4 20D-41