What is a common factor to consider when using the subdivision development method for parcel valuation?

When using the subdivision development method for parcel valuation, development costs play a crucial role in determining the potential value of the property. This method is oriented towards estimating the value of undeveloped land, specifically by calculating the total anticipated costs associated with developing the land into a subdivision.

These costs could include expenses related to infrastructure improvements such as roads, utilities, and drainage systems, as well as costs for zoning changes and permits. Assessing these development costs allows appraisers to provide a more accurate valuation based on the potential profitability of the project once the land is developed and sold.

While historical sales data, projected future rental income, and total land area are important considerations in property valuation, they do not directly address the immediate costs associated with development that will affect the project's financial viability. The subdivision development method focuses on these upfront costs as a means to calculate the overall feasibility and market value of the property once developed.