Highest and Best Use

The principle of Highest and Best Use is the most critical concept in determining the value of land. It asks: "What is the most profitable, legally permissible, and physically possible use for this specific piece of land right now?Determination and Transition: This use is fundamentally determined by potential users bidding for the site based on its location and environmental value. For example, a corner lot might be worth $100,000 as a site for a single-family home, but $500,000 as a site for a gas station. If the demand for commercial space rises and the value of the site as a gas station exceeds its value as a home, a "land use transition" begins. The property will eventually be sold and converted to its new, more valuable use.