Question

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

Answer 1

Answer:

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