What is described as the highest and best use of a property?

The highest and best use of a property is defined as the use that is legal, physically possible, financially viable, and produces the maximum yield. This concept is crucial in real estate valuation as it assesses the most optimal way a parcel of land can be utilized to achieve its greatest potential value.

This definition encapsulates several essential criteria for determining the best use of a property. First, the use must be legal, meaning that it complies with local zoning laws and regulations. Next, it must be physically possible, considering the characteristics of the property itself, such as location, size, and physical condition. Financial viability ensures that the use is economically feasible, meaning it generates sufficient revenue to cover costs and provide a return on investment. Finally, maximum yield indicates that the use should result in the highest possible income or value it can generate.

When all these factors align, the property is effectively positioned to provide its owner with the greatest possible return, making choice C the correct answer. This comprehensive approach distinguishes the highest and best use from other less optimal uses, such as those that may focus solely on personal enjoyment or those that yield minimal financial return.