The value of the land component of the residual value may be important due to differing ownership of the land vs. the improvements. In this case, the value of the land is determined by MV by the following rules.
MV equals zero: land value is same as original cost of land. MV less than .2: land value is capitalized value of ground rent and related kickers. MV between .2 & 1: land value is MV times total ending value. MV greater than 1: land value is taken to be MV.
The default value of MV is .2, meaning that land is 20% of the total value of land and improvements.
A maximum value can be imposed for land with MV. If this input is used, then the value cannot be greater than the value input as MV no matter what value is produced by the methods described above using MV.
|AVI||End Land Vlu:0=-1↑land;<.2=caprate GR&KKRS;1.2=% vlu;>1=vlu)||535||1|
|AVI||Maximum Value for Land||535||1|
|AVI||Kicker # Used Ending Land Vlu (e.g.AVI[76,77]=1,2;KICKERS[R;])||535|
|AVI||Residual Value to Kicker (e.g.3.12→lst 3 Yrs Capped 12%)||535|