Chapter 21 – The Appraisal Process

Question 1

What are 4 appraisal methods?

Answer 1

Comparative
- residential or land only

Income
– Commercial/revenue
(Based on the rate of return, or cap rate, or yield, or %.

Cost = church
– Nothing to compare
- Income relevant
Example Law courts or church

Residual = redevelopment
– Latent value
Based on redevelopment potential

Question 2

What does latent value mean?

Answer 2

Value of a property that has potential for redevelopment - property that isn’t at its best use