Amenity Value
The term amenity value refers to the worth or pleasant feeling added by using or seeing something. The amenity value definition would be the value that an individual amenity adds to the property. But what is amenity value, and what is it used for?
What does Amenity Value Mean?
An amenity value is a type of evaluation generally used to determine whether the amenity cost is worth the benefit it can bring. The term amenity value is used in two different ways by assessors. Either when natural resources are considered amenities or when investments are added to increase the property’s value. We’ll take each situation individually and explain them both in a moment but first, how does amenity value work for properties.
When we have a single-family home, every potential buyer will take a look at the list of amenities that the property has access to. These amenities can be public or private, and how the valuation of these amenities is done differs.
What is Amenity Value in Real Estate?
The most common use of amenity value is to determine the value of natural resources as they are, compared to their value if they are harvested. The amenity value added to residential developments by a virgin forest located nearby determines if the revenue is higher than the harvested timber’s value. When considering this, the valuation must take into account the fact that the forest’s value can decrease if it is harvested.
In this scenario, the forest has amenity value, meaning that it adds appeal for buyers or lenders. This appeal can impact the property’s market value. To determine a forest’s amenity value for a property, the assessor compares the value of that particular property to real estate comparables that do not have a forest nearby.
Amenity value in real estate is also applied to rentable, built, or differentiable amenities. Adding amenities to a property for the added value that they bring isn’t always simple. The more, the merrier concept can not be applied here because there is such a thing as too many amenities. Being somewhere in the middle, not too few, but not too many, should be considered reasonably safe for investment purposes. The real estate investor or seller should also look into preferred amenities for the property and its potential buyers.
For example, in an office building, amenities such as recreation rooms or rooftop lounges would positively impact the unit’s fee, but a pool might be useless. For residential properties, a theater room or pool would be a plus, while an escalator is useless. Public amenities for residential properties like a playground, school, or a forest also impact the HOA fees.
Popular Real Estate Terms
An acre is defined as a land unit that is commonly used in the US customary and imperial systems of 66 by 660 feet (one chain by one furlong). An acre is a measure of volume used in many ...
Arrears is a legal and financial term used to describe payments in regards to their due dates. While the term is more often used to refer to a contractual obligation or liability that was ...
revising the terms of a loan such as when the borrower is experiencing severe financial difficulties. For example, a homeowner lost his job and seeks relief by requesting the lender ...
Real rate of interest on a loan. It is the coupon rate divided by the net proceeds of the loan. Assume Sharon took out a $1,000,000, on year, 10% discounted loan to buy real estate. The ...
Clause inserted into a commercial lease by a mortgagee stating the lessee's current lease will not be terminated if there is a foreclosure action against the landlord for the failure to ...
Ownership of property by two or more people in undivided interests, without the right of survivorship. Each coowner's interest may be conveyed separately by its owner. Tenancy in common ...
Molding used in corners simulating a quarter of a circle. ...
Rooflike cover that extends over any place to provide shelter from the sun, rain, or wind. ...
Civil rights acts passed by the U.S. Congress includes those of 1866, 1870, 1871, 1875, 1964, and 1968. The first two acts gave blacks the rights to be treated as citizens in legal actions, ...
Have a question or comment?
We're here to help.