Man-made additions to real property, such as: buildings, fencing, utilities, septic, etc. Improvements tend to increase
value of vacant land but not necessarily.
One of the 3 major approaches to value estimation. It is based on the idea
that a property’s ability to generate net income creates value. That is, a future net income stream commands a price in the market
place for which there are buyers and sellers. This relationship can be expressed as follows:
V = I/R
where: V = value of the property or investment
I = net income generated over a given time period, usually per year
R = rate of return,
aka capitalization rate, usually per year
So, in order to estimate value by way of the Income Approach, two components need to be established:
annual net income and rate of return. Of course, since it is a simple equation, as long as any two components are known, the third
can be calculated.
Irrigation Non-expansion Area
The date or dates on which the appraiser inspects the subject property.
Many times, depending upon the size or complexity of the project, an appraiser may visit or inspect the subject several times over
several days. The value date and the inspection date(s) have nothing to do with each other.
Damage to and/or reduction
in value of a property resulting from actions of a condemning authority (government or agency thereof), from which, the property owner
proceeds through the judicial system to force said authority to pay just compensation for alleged damage and/or loss.
Loss in property value, partial or total, resulting from circumstances beyond a property owner's control, such as: condemnation,
destruction, theft, etc.
The money or in-kind equivalent given to a property owner (typically called condemnee) by
a condemning authority (typically a public body, such as: a city and called condemnor) deemed to be fair and just to both parties
and that fully compensates, i.e. makes whole, the property owner for any property rights taken as a result of the condemning authority’s
action.
See Whole Property.
An estate in property, less than fee simple, of limited duration and of limited
use. Although the lessee (aka tenant) may have significant rights and use, ownership is not conveyed. At the end of a lease, all rights,
privileges, and use the lessee may have enjoyed revert back to the lessor (aka owner or landlord).
Properties for sale through
a real estate broker. “For sale” properties theoretically set the upper end of value in any market, whether or not prices are rising
or falling.
An environment in which the buying and selling of goods and/or services takes place, price being the result of the
free play of demand and supply, and in which there are many buyers and sellers.
One of the 3 major approaches to value
estimation. It is based on the idea that value can be derived from comparing the subject property to recently sold similar properties
with allowances for differences. Comparables inferior to the subject property (i.e. those not as good as or offering fewer or lower
quality amenities and features than the subject) likely suggest the bottom value range for the subject property and comparables superior,
the upper. If adjustments are attempted, amenities or features inferior or not as good as the same subject amenities or features are
adjusted upward and those superior adjusted downward. Inferior comparables may be adjusted upward based on individual amenity differences
in order to indicate a value for a subject property. And superior comparables may be adjusted downward.