Explain why market analysis method is more likely to be used

Reference no: EM131959380

Problem

Answer the following series of questions related to property tax assessments and evaluations. For each question, please explain your answers as fully and clearly as possible.

1. Assume that an office building typically yields net income of $1.5 million per year. The county has assessed the building at $20 million, based on the price of comparable buildings sold in the area. Assuming a discount rate of 10%, what alternative value might you assert for property tax purposes?

2. Your client is in the process of building a new factory. What sort of detail would you suggest the client keep on its costs?

3. Your client, who owns several factories, has for years paid the property tax assessed without question. What sort of information might you request from the client in an attempt to reduce the client's property taxes?

4. Explain why the market analysis method is more likely to be used in an appraisal of residential real estate than for an appraisal of commercial real estate. Also discuss the alternative methods for appraising commercial real estate and their advantages over the market approach.

Reference no: EM131959380

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