Land-to-Building Ratio
Site area divided by building area. High ratios can indicate expansion potential or excess land; low ratios indicate intensive site use. A quick screen for whether land or improvements dominate value.
Related Terms
Floor Area Ratio (FAR)
FARTotal building floor area divided by site area — zoning's density dial.
Excess Land
Land that is not needed to support the existing improvements' highest and best use and can be separated and sold independently.
Site
Land that has been prepared for use — graded, with access and utilities available.
More in Land & Site Valuation
View allAllocation Method
A land valuation technique that estimates land value by applying the typical ratio of land value to total property value observed in the market.
Extraction Method
A land valuation technique that estimates land value by subtracting the depreciated cost of improvements from the total sale price of an improved property.
Land Residual Technique
A land valuation method that estimates land value by capitalizing the net income remaining after deducting the return attributable to the improvements from the property's total net operating income..
Ground Rent Capitalization
A land valuation method that estimates land value by capitalizing the ground rent (the rent paid for the use of land only, without improvements) at an appropriate capitalization rate..