Residual land value is a method for calculating the value of development land. So you approach the owner of the land about selling and she says, “Okay, bring me an offer.” How much do you pay? What is the land even worth to you? What if there are no comparable properties to use to accurately appraise the land, how can you justify the offer you’re about to give the seller? One way to arrive at an appropriate price is calculate the project’s ‘ Residual Land Value.’ You spot a prime parcel of land that would be perfect for your real estate project.
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