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INCOME APPROACH
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IF there is no VERIFIABLE RENTAL DATA we can NOT USE
the INCOME APPROACH
Because we found NO RENTAL DATA for SCHOOLS in Sandusky
County...
We were NOT ABLE to DEVELOP The INCOME APPROACH OPINION
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GROUND LEASE
APPROACH OPINION
The SECOND PART of the original Preliminary Ap-
praisal Assignment is to PROJECT a valid Ground Lease
Rent in the Event that the Owners would SELL the Im-
provements and RETAIN the Land.
WORD OF CAUTION
IF the Improvement Sale is desired, the area of Liabil-
ity Insurance could be a problem. We found NO local
Agent that sells a Liability Policy for a School to the
Owners of the LAND ONLY ! They all require that the
IMPROVEMENT BUYER secure the Liability Insurance with
the LAND OWNER being included as an ADDITIONAL INSURED
PARTY.This would be an important question to raise with
your present Insurance Agent.
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LAND VALUE from the COST APPROACH is
$ 35,000 or $17,000 per acre
The goal of a Reasonable Ground Lease Program is
to select Rates that will give a Return on the Invest-
ment and a Return of the Capital Value over a fixed
period of time. To develop a Reasonable Rate per year
to accomplish these Two Goals, the Built Up Rate Method
is the most feasible one for the Subject Land.This
Method uses a SAFE Rate, a RISK Rate, an INFLATION
Rate, a LAND TAX Land Tax Rate, and a RETURN OF CAPITAL
INVESTED Rate over a 20 year period.
Projected Built-Up Rate:
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