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Interim Use

DEFINITION

Temporary use of a property until the property can be utilized for a more beneficial purpose that maximizes its value.

EXPLANATION

Interim use is the temporary use of a property until the property is later used to its highest and best use. Land that is not utilized to its highest and best use is being used on an interim basis. In real estate, interim use refers to when a property is not sufficiently being used to the maximum capability of the land.

For example, an old run-down multiunit building is used on an interim basis because the property is not being used to its maximum capability. If the same property is developed into a newer building, the property would not longer be used on an interim basis.

Oftentimes, land is not developed to its maximum capability for a few reasons. One of the main reasons is the property owner doesn’t have the money or desire to fix or construct a new property on the land. Another reason could be the population density of the neighborhood the property is located is very small, therefore it would not make financial sense for the owner to develop the property.

It is common for older generations to keep their properties in the same condition as when they first bought it. In situations such as these, younger home buyers or experienced real estate investors will often purchase these type of properties and redevelop the land to utilize it for a higher and better purpose.After this is done, the land is no longer being used on an interim basis.

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