The importance of highest and best use analyzes is demonstrated, especially for non-residential properties. While in most of the work on evaluating single-family houses, there is no need to analyze the highest and best use, since these houses are in the middle of residential areas. Another case in which the determination of best use becomes an important consideration is when the evaluator examines a vacant lot, or a land that has a current legal regulation different from what it was in the past. Traditionally, better use requires less analysis when evaluating existing rather than proposed properties. Whatever the case, the upgraded building (the building with the facilities and improvements) does not always achieve the highest and best use. A substantial element in the analysis of higher and better use is to understand the market forces affecting the real estate, and the quality of surrounding real estate and the extent to which the real estate is evaluated and is very important when assessing a proposed building, whether residential or commercialized.
Top and Best Usage Test:
The four tests of the highest and best use of real estate are:
