Colibri Real Estate 30-Hour Alabama Post License Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Boost your real estate career in Alabama with the Colibri Real Estate 30-Hour Post License Exam. Prepare thoroughly with simulated quizzes, including multiple choice questions and detailed insights to ace the test and advance your professional journey.

Start Multiple Choice Practice Test
Start Flash Cards

Practice this question and more.

What principle refers to the single use of a property that yields the highest income?

  1. Rentability

  2. Market value

  3. Highest and best use

  4. Property investment

The correct answer is: Highest and best use

The principle that refers to the single use of a property that yields the highest income is known as "highest and best use." This concept is foundational in real estate valuation and investment analysis. It identifies the most profitable legal use of a property, considering factors such as zoning laws, market demand, and the physical characteristics of the property. By determining the highest and best use, investors and appraisers can better assess the value and potential of a property, ultimately guiding investment decisions and property development. In contrast, rentability focuses on the property's ability to generate income through leasing, which is related but not the same as identifying the highest and best use. Market value pertains to what the market perceives as the worth of the property based on recent transactions and conditions, rather than the most profitable use specifically. Property investment encompasses a broader range of concepts and strategies, not limited to the utilization aspect that the highest and best use principle emphasizes.

More Questions Like This