The going-concern value of a property refers to what?

The going-concern value of a property refers to what?

• A. The land value alone
• B. The value of the property as a functioning business
• C. The resale value of the property
• D. The assessed tax value

Answer: (B)

Going-concern value is a term used in real estate and business to refer to the value of a property as it operates as a functioning business. This concept encompasses more than just the physical asset itself; it includes the tangible and intangible assets that contribute to the property's income-generating potential. This value takes into account existing contracts, clientele, brand reputation, and the overall operational efficiency of the business on the property. For example, a hotel not only has real estate value related to its land and structures but also possesses additional worth due to its ongoing operations, established customer base, and operational systems. In contrast, options that focus solely on land value, resale value, or assessed tax value do not capture the full picture of what makes a property valuable in a business context. Therefore, understanding going-concern value is essential for assessing the overall worth of income-producing properties in the real estate market.

Going-concern value is a term used in real estate and business to refer to the value of a property as it operates as a functioning business. This concept encompasses more than just the physical asset itself; it includes the tangible and intangible assets that contribute to the property's income-generating potential.

This value takes into account existing contracts, clientele, brand reputation, and the overall operational efficiency of the business on the property. For example, a hotel not only has real estate value related to its land and structures but also possesses additional worth due to its ongoing operations, established customer base, and operational systems.

In contrast, options that focus solely on land value, resale value, or assessed tax value do not capture the full picture of what makes a property valuable in a business context. Therefore, understanding going-concern value is essential for assessing the overall worth of income-producing properties in the real estate market.