When there is a dearth of recent land sales data, which technique may the appraiser use to estimate land value?

The land residual technique is appropriate for estimating land value when there is insufficient recent sales data. This method derives the value of the land by examining the income generated from a property. Essentially, it involves estimating the overall value of a property and then deducting the value of the improvements (buildings, structures, etc.) on it.

By focusing on the income approach, the appraiser can isolate the earnings attributable to the land itself, thus providing a more accurate valuation even in the absence of recent comparable sales. This technique utilizes the principle that the value of land reflects its contribution to the overall income-producing ability of the property. Since the other options related to property, building, or mortgage residual do not specifically target the valuation of land in the same context, they are not suitable choices for estimating land value directly when recent sales comparisons are limited. The land residual method uniquely addresses the challenges associated with scarce data by leveraging income potential, making it a well-suited approach for this scenario.