Interim Use
A temporary use of a property that is expected to change in the foreseeable future as market conditions evolve or when the property becomes ripe for development to a higher use.
An interim use exists when the current use is the highest and best use for the time being but is expected to transition. Examples include a single-family home on land zoned for commercial development (the home is the interim use until the market supports commercial development), or a parking lot in a downtown area that will eventually be developed into a high-rise. The appraiser must identify and explain interim uses because they affect valuation methodology — the property may be valued based on its development potential rather than its current income or comparable improved sales.
Related Terms
Highest and Best Use
HBUThe reasonably probable use of a property that results in the highest value, considering uses that are legally permissible, physically possible, financially feasible, and maximally productive..
Financially Feasible
The third test in highest and best use analysis: a use must generate sufficient income or value to justify the cost of development, including land cost, construction costs, and a market rate of return..
Land Value
The market value of a parcel of land as if vacant and available for development to its highest and best use.
Site Value
The market value of the land as if vacant and available for development to its highest and best use.
More in Highest & Best Use
View allLegally Permissible
The first test in highest and best use analysis: a use must be allowed under current zoning, building codes, environmental regulations, deed restrictions, and other legal constraints to be considered..
Physically Possible
The second test in highest and best use analysis: a use must be physically achievable given the property's size, shape, topography, soil conditions, access, and available utilities..
Maximally Productive
The fourth and final test in highest and best use analysis: among all financially feasible uses, the maximally productive use is the one that produces the highest residual land value (or highest property value for improved properties)..
Conforming Use
A property use that complies with current zoning regulations and is consistent with the predominant land use pattern in the neighborhood.