In real estate appraisal, Highest and Best Use refers to the reasonably probable and legal use of land that results in the greatest economic return over a given period of time. This use must be physically possible, legally permissible, financially feasible, and maximally productive.
Determining highest and best use is a fundamental step in valuation, as it establishes the basis for estimating a property’s value. It may differ from the property’s current use if a more profitable use is supported by market conditions and regulatory requirements.
