Tihomir Pelov
Abstract: The residual value method is a fundamental instrument of the revenue approach in estimating land for construction. Its application stems from the principle of the most complete and best use of real estate and the principle of residual (hidden) productivity of the earth. The report clarifies the application of these principles and illustrates, by way of example, the use of the method in determining the market value of terrains with various options for the most efficient and effective use.
Key words: real estate; revenue approach to valuation; residual valuation method.
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