The Subdivision Development Method is a method of estimating land value when a subdivision and its development are the highest and best use of the parcel.
Steps in the subdivision development method of estimating land
| 1. | An estimate of the gross revenues from sale of the proposed subdivision lot is made. |
| 2. | The resultant net proceeds of lot sales is discounted to present value using a market derived discount rate. |
| 3. | Direct costs, indirect cost, and entrepreneurial incentive are estimated. |
| 4. | The resultant costs are discounted to present value using the market derived discount rate. |
| 5. | The value of the raw land is the present value of the net proceeds of lot sales raw land. |
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