What does maximally productive mean?

Maximally Productive. The fourth test is essentially a test for maximum return. The appraiser is seeking the most profitable (maximally productive) among all physically possible, legally permitted, and financially feasible uses.

What is HBU analysis?

The HBU analysis provides the blueprint for comparable selection, and helps all parties in determining the eventual conclusion of value. According to the 13th Edition of the Appraisal of Real Estate, market value is to be determined with reference to the property’s highest and best use.

How does an appraiser determine highest and best use?

A property must be appraised in terms of its highest and best use. The definition of highest and best use is as follows: The reasonable, probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.

What are the four tests for highest and best use?

The four tests of highest and best use are: (1) legally permissible (2) physically possible (3) financially feasible and (4) most profitable. The first two tests are interchangeable in order and, in many circumstances, the last two are combined.

What are the four criteria for highest & best use?

The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity.

What are the four criteria for highest and best use?

What is the highest and best use principle?

1: “That reasonably probable and legal use of vacant land or an improved property which is physically possible, appropriately supported, financially feasible, and that results in the highest value.” 12.34.

What are the 4 tests for highest and best use?

What are the four major physical aspects of a lot?

The physical aspects of a lot include: size and shape; slope, drainage and soil; view, exposure to sun and weather; and.