In the allocation method, how do you calculate the land value from a subject value?

In the allocation method, calculating land value from a subject property value involves utilizing an allocation ratio, which is determined based on the relationship between the value of land and the total value of the property (which may include both land and improvements).

To find the land value, you multiply the subject property’s total value by the allocation ratio. This ratio represents the proportion of the total property value that is attributable to the land itself. For example, if the allocation ratio indicates that 30% of the property’s value is attributable to the land, then applying this ratio to the subject property’s total value will yield the land value.

Thus, using the allocation ratio in this way logically allows you to isolate and determine the land's contribution to the overall value, making this method practical for appraisers when assessing property divisions between land and improvements.