Question

Your president bought two acres of land for $200,000 ten years ago. Although it is zoned for commercial use, it currently houses eight small, single-family houses. A property management fir that wants to continue leasing the eight houses has offered you $400,000 for the property. A developer wants to build a 12-story apartment building on the site and has offered $600,000. What value should you assign to the property?

Not sure how to go about this do I need to figure out output of the two different properties?

Answer 1

Your president bought two acres of land for $200,000 ten years ago.
Although it is zoned for commercial use, it currently houses eight
small, single-family houses. A property management firm that wants
to continue leasing the eight houses has offered you $400,000 for the
property. A developer wants to build a 12-story apartment building on
the site and has offered $600,000. What value should you assign to
the property?