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23 January, 00:08

A single parcel is valued at $450,000. Zoning allows it to be subdivided into 8 lots and it is estimated that each lot could sell for $50,000. Site development costs (sewer, grading, road, etc.) would cost $50,000. What is the highest and best use?

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  1. 23 January, 01:59
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    Selling the single parcel without dividing it into lots

    Explanation:

    There are three possible uses for the parcel: selling the parcel, selling the lots without development, and selling the lots with development.

    Selling the parcel would earn $450,000

    Selling the lots without incurring in development costs:

    8 lots x $50,000 selling price per lot = $400,000

    Selling the lots while incurring in development costs:

    $400,000 - $50,000 = $350,000.

    Therefore, the best option is to sell the single parcel, without dividing it into lots.
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Home » Business » A single parcel is valued at $450,000. Zoning allows it to be subdivided into 8 lots and it is estimated that each lot could sell for $50,000. Site development costs (sewer, grading, road, etc.) would cost $50,000. What is the highest and best use?
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