Which method of land valuation is represented by the equation, "Value of land = Anticipated sales of finished lots - development costs"?

The equation "Value of land = Anticipated sales of finished lots - development costs" is indicative of the subdivision method of land valuation. This method focuses on evaluating the potential value of land based on its future use, specifically how much can be earned from developing it into lots for sale.

In this approach, appraisers consider the anticipated revenue that will be generated from selling each finished lot once the development is complete. From this prospective income, they subtract the costs associated with preparing the land for sale, which can include expenses related to site work, utilities, and other necessary development costs. The resulting figure provides an estimation of the land's value based on its potential to be developed and sold as individual lots.

The other methods mentioned do not align with this equation. Market analysis typically looks at comparable sales to determine value, the income approach evaluates property based on its potential income generation (rather than sales of finished lots), and the cost approach estimates value by considering the cost to create a property minus depreciation. Each of these methods uses different mechanisms to arrive at value, making subdivision the fitting choice for this particular equation.