What is the primary purpose of the subdivision method of land valuation?

The primary purpose of the subdivision method of land valuation is to calculate potential value from developed properties. This method is particularly useful for appraisers who are assessing undeveloped land that has the potential to be subdivided into smaller lots for residential or commercial development. By analyzing the expected value of these individual parcels once they are improved and sold, appraisers can arrive at a more informed estimate of the total value of the larger tract of land.

This approach involves considering factors such as current market trends, demand for various property types, and local zoning regulations that might affect how the land can be developed. The ultimate goal is to derive an estimated value which reflects the potential greatest use of the property, making it particularly relevant in planning and investment decisions. In contrast, other options focus on aspects that do not align with the intent of the subdivision method, such as historical values, risk assessments, or tax obligations.