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16 January, 13:38

A parcel is valued at $450,000 as a single unit. Zoning allows it to be subdivided into 8 lots and it is estimated that each lot could sell for $70,000. Site development costs (sewer, grading, road, etc.) would cost $65,000. What is the highest and best use

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  1. 16 January, 14:50
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    subdivide the land

    Explanation:

    The highest and the best use is the option with the best returns.

    Option 1: Selling as a parcel is $450,000

    Option 2: 8 plots at $70,000 will fetch

    = 8 x $70,000

    =$560,000

    Site development cost $65,000

    the plots will fetch 560,000 - 65,000 = $495,000

    The best option is to subdivide the land
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