ABSTRACTION METHOD
The abstraction method used to estimate
the value of property from a knowledge of normal net income, discount rate,
remaining economic life of the property, value of the building, and income
path attributable to the land. The method estimates total value by
discounting the income stream attributable to the land and adding the result
to an independent estimate of the value of the building. Also called land
residual technique.
Real Estate
and Mortgage Terms
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