ASSIGNMENT NO 9

ASSIGNMENT No 9



ASSIGNMENT No 9

Highest and Best Use Estimate

Definition

Highest and best use is defined in the text Appraisal of Real Estate (2nd Canadian edition) as "the reasonably probable and legal use of vacant land or an improved property that is physically possible, legally permissible, appropriately supported, financially feasible, and that results in the highest value". An attempted analysis of highest and best use involves two considerations: [1] the most likely and profitable use of the site "as if vacant" under the requirements set forth above and, [2] if a property is "already improved", it is the use that should be made of the property to maximize value for non-income producing properties or, maximize net operating income on a long range basis for investment properties. In cases where capital expenditure is necessary to renovate or improve an income producing property, these costs must provide a sufficient rate of return (to the owner) for the total amount invested in the site and building improvements.

Legal feasibility of land as though vacant

The immediate area near the subject property is single family dwellings. The subject property is located in RS-1 zoning in the town of New market; it allows the development of single-family residential dwellings, and conditionally one-family dwellings with secondary suites. Historical district controls, private restrictions, and environmental regulations are not applicable to the subject property. The town of New market continues to maintain the general area as a low density residential zone as stated in city plans. According to RS-1 schedule, cultural and recreation facilities (e.g. community center or neighborhoods house, golf course or driving range, library in conjunction with a community center, marina, park or playground, stadium or arena, zoo or botanical garden), institutions (e.g. ambulance station, child day-care facility, church, hospital, public authority use essential in this district, school, social service center, special needs residential facility), parking, retail, service, and utility and communication may be allowed with relaxation of regulations to built in RS-1 zone. The most probable use of the subject site as if vacant, would be for a detached single family residence with comparable style and quality as exhibited by other residences in the neighborhood. There is good evidence to support the demand for single family building lots with current and past sales activity of improved single family. The market evidence and physical characteristics of the subject site does not indicate any demand of possible uses in a “conditional approved use” as is permitted in the current zoning.

Physical feasibility of land as though vacant

The subject site, which we have selected, is situated in a location which is 40km away from downtown Toronto. The characteristics of the subject site are 3557 SF, being rectangular in shape and the site is leveled from road grade. The location the subject site is away from forests, rivers and mountains, making it a plain area. The site which we have selected (subject site) lies in the residential zone which is earthquake proof. This type of technology is also witnessed in various ...