What is the highest and best use?
The highest and best use is a method of valuation of real estate, which attempts to determine the most profitable use for the land. This determination is first based on the use of land to fulfill legal obligations and what the land is physically able to provide. Once these considerations are made, the highest and best use of land or HBU is determined by financial considerations and the use of land that maximizes profits. Market forces and factors, unlike subjective evaluation, are essential for the HBU of a particular land to be found. The highest and best use is a very practical evaluation method, because basically the root of any intangible elements of the evaluation and brings matters to certainty. Such a reality as what a country can physically bear, how much potential is for profit and how much financial commitment will take to improve the soil so that it can achieve this potential factor in the HBU.
whether the soil is unoccupied in DBoth, when they are considered, or whether improvement on Earth has already been made, also play a major role in determining its highest and best use. For example, unoccupied soil is usually assumed in terms of its commercial potential and possible profitability. On the other hand, the land on which the buildings have already been built can have more value as unoccupied assets for further sale, in this case the demolition of buildings may be the most profitable decision.
legal concerns, such as territorial planning issues in this respect, legal fees arising to settle all legal obstacles should be considered. The physical properties of property and its surrounding placement also play in the HBU. For example, a real estate cake located near a number of commercial real estate would most likely deserve a commercial business on real estate to make full use of location.
In this way, the reality of the location is measured in accordance with financial concerns in the implementation of the highest and the best use of the property. This final, the mostThe more common part of the HBU evaluation focuses on market issues related to property. For example, if the aim of a commercial enterprise is, the landowner must determine whether the market has sufficient demand for a particular business. Finally, using the soil to get the most profit of the investment, the final goal of the HBU evaluation.