When it comes to the valuation of agricultural properties , the physical and environmental aspects of the property assume special importance. The appraiser observed that the area has no irrigation or irrigated canal , the terrain is plain with slope portion at the middle part of the property . There are some coconut trees with some perennial trees growing in the area . No crops were planted in the area , it seems that the rawland is idle . The barangay road is adjacent to the area and just few meters away from the developed four lane diversion road going to Cagayan de Oro City. Upon conducting the highest and best use of the property , the property can be of residential as vacant and as improved , since Laguindingan is the next major development compared to the neighboring municipalities. For approaches to value , the appraiser apply the Income Capitalization Approach and Sales Comparison Approach . For Income Capitalization Approach , we will use the Hypothetical Development Approach since the area is suitable for subdivision , we will project for three years , the Gross Income then deducted from the development expense to arrived at Net Operating Income , with capitalization rate of 12% and discount rate of 6% . For Sales Comparison Approach , we just gather the comparables with same nature to the property and adjust for their element comparison to arrive at the market value . The final market value will then be reconciliated to Income Approach and Sales Comparison Approach .
