Date of this Version
Riggs, S. 2018. Quantitative Appraisal of Non-irrigated Cropland in South Dakota. Undergraduate Honors Thesis. University of Nebraska - Lincoln.
This appraisal attempts to remove subjectivity from the appraisal process and replace it with quantitative analysis of known data to generate a fair market value of the subject property. Two methods of appraisal were used, the income approach and the comparable sales approach. For the income approach, I used the average cash rent for the region, the current property taxes for the subject property, and a capitalization rate based on Stokes' (2018) capitalization rate formula to arrive at my income-based valuation. For the comparable sales approach, I utilized Stokes' (2018) research in optimization modeling to estimate a market value for the subject property. To do this, the nonlinear program assigns a weighted value to each comparable sale; based on the attributes of acres, percent tillable acres, and productivity. The solution determines the weight that each attribute should be valued when valuing the subject property. Dollar values are assigned based on the weight of each variable, and a final appraised market value is generated. Qualitative research in terms of visually inspecting each property for similarities and differences was completed prior to beginning the quantitative analysis to verify the validity of each comparable sale utilized. The expertise of local landowners, an ag-land appraiser, and a realtor was also utilized for background on the South Dakota land market.