When a property can be used for residential or commercial uses as a result of the property’s zoning or use permits, it is typically referred to as a mixed-use property. Properties that can be used for different purposes because of their location, zoning, or permitting have a special place in the world of real estate appraisal. An appraiser must determine what the highest and best use of a property is before concluding its value.
Although an appraiser must determine the highest and best use of any property to determine its value, mixed-use properties technically can be used for more than one purpose. The appraiser must determine which use will result in the highest value when considering the market conditions existing at the time of the appraisal.
Mixed-use properties are often used for a period of time as residential properties, and then when the market conditions change, they might be used for industrial or commercial purposes. By studying the market activity and the economic conditions in the property’s region, the appraiser determines which use will result in the highest value.
Contact us to find out if your property can have multiple uses.