What technique is employed when a building value is known but the land value is not?

The land residual technique is applied in situations where the value of the building is established, but the land value remains uncertain. This technique focuses on determining the value of the land by subtracting the value of the improvements (in this case, the building) from the overall property value.

By first calculating the income generated by the property and then deducting the operational costs and the building's value, appraisers can isolate and derive the value of the land itself. This approach is instrumental when the land's direct market value is difficult to determine due to a lack of comparable sales or when the income generated from the property plays a significant role in understanding its worth.

Other techniques mentioned might serve different purposes in appraisal practice. For example, the gross income multiplier is used to estimate property value based on its income but does not specifically address the challenges posed by unknown land value. Similarly, the cost approach focuses on the cost to replace or reproduce a property rather than isolating land value directly from improvements. Income capitalization is more about deriving the value of income-producing properties through their projected income rather than pinpointing land value when the building is known.