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CABARRUS COUNTY 2012 APPRAISAL MANUAL <br />Present value of the Land equals annual income allocated to land capitalized at the discount rate. <br />($3,000 divided by .10) $30,000 <br />Plus current building value $100,000 <br />Estimated value via Income <br />Capitalization Straight Line Land <br />Residual Technique $130,000 <br />LAND RESIDUAL - LEVEL ANNUITY <br />If contract rent is applicable (long -term lease with prime tenants) the land residual, level annuity technique should <br />be used as follows: <br />Net Operating Income $15,000 <br />Less annual income allocated to building <br />(Building value divided by PW of 1 per <br />Annum @ 10% for 50 years) 100,000 <br />9.915 -$10,086 <br />Equals income allocated to land $4,914 <br />Present Value of Land equals <br />Annual Income allocated to land capitalized at the Discount Rate <br />($4,914 divided by .10) $49,140 <br />Plus current building value $100,000 <br />Estimated Value via Income Capitalization Level $149,140 <br />BUILDING RESIDUAL TECHNIQUE <br />When the land value can be accurately estimated using the market and the improvements are older buildings or <br />other than the highest and best use, a Building Residual Technique can be employed. <br />Building Residual - Straight Line <br />Given: Land Value (from Market or Sales Comparison) $30,000 <br />Net Operating Income $15,000 <br />Cabarrus County — 2012 Revaluation INCOME PROPERTY VALUATION 8- 10 <br />05/24/01 <br />Attachment number 9 <br />G -6 Page 281 <br />