Analyzing Complex Appraisals for Business Professionals

Chapter 3

Analyzing the Land Appraisal

The sales comparison approach is the only method that can be used for land appraisals unless the land is leased or in some other way produces income. Land is sometimes leased for grazing, parking, or other uses. However, when it is leased for structures, the lease is generally long term—often for 20 years or more—and leases of this type are more common in other countries than in the United States.

With long-term leases, the lessee may build a structure, and generally the ownership of the structure goes to the lessor at the end of the lease. A typical lease for land in the United States would be for a cell tower. Depending on the agreement, the lease may require the lessee to remove the tower at the end of ...