Property is always valued on the basis of its highest and best use, which may or may not be its present use. Land value is based on the highest and best use of the property as if vacant and ready for development to that use. The highest and best use must occur within the reasonably near future and can t be remote or speculative. In the real world, very few properties are developed to their highest and best use. Every site has physical characteristics which determine its highest and best use.
Some properties have value-enhancing views and frontages.
Other properties are limited by poor access, steep topography or unstable soil. The site may have poor drainage and require an expensive type of septic system. It may be in the path of urban growth or in the middle of nowhere. Sometimes you have to balance the positive and negative attributes. For example, an ocean front property may have geologic problems which require special foundation work, but the value of the ocean frontage may be worth the expense.