Definitions for "Highest and Best Use"
The legally and physically possible use of land that is likely to produce the highest land (or property) value. It considers the balance between site and improvements as well as the intensity and length of uses.
The use or uses of a property, chosen from various possible uses, that generates the highest most probable market value, as limited by market demand and supply, the propertyâ€(tm)s own characteristics, physical and economic feasibility, location, access, utilities, environmental hazards, “grandfathered” rights, and pertinent legal restrictions. Thus, anything that can affect value can affect highest and best use. Further, it is a market driven concept and does not take in to consideration non-economic subject property uses, such as: parks, open space, public schools, libraries, athletic fields, etc., except as they may otherwise impact value. Its focus is upon what the property can sell for in the marketplace, even if a non-economic use is very desirable. For example, if it is found that a subject property has 4 potential uses: A, B, C, and D, and that use A generates a most probable market value of $100, use B $90, use C $80, and use D $100, then the highest and best use of this property is both A and D.
The property use that at a given time produces the greatest net worth return.
Keywords:  rent, earn, maximum, investment, market
That use which allows an investment property to earn the maximum market rent