Are you planning on purchasing or selling a piece of land, but you are unsure about how much it’s worth? Things are different than with the markets of residential and commercial properties. Land might not have structures, bathrooms, and bedrooms. However, there are other features that help to determine land value properly. These are the primary factors that could affect the selling price!
1. Is It All Usable Land?
There are many ways how a land can be “usable.” For example, your entire property could have an agricultural zone. However, if you analyze the land, you’ll realize only half of it is suitable for crops.
Here is a simple example – let’s say that you are selling ten acres of land, but only four are suitable for sustaining crops. The price you get could be lower than for a property where there are five acres, but they are 90% suitable for crops.
2. Location
If you want to know how to determine land value properly, you can’t undermine the importance of location. A similar land structure can be priced differently in various counties. You should also consider the area’s potential to reach the next level of development.
Are any big residential and commercial projects announced for the next few years? Is the location perfect for hunting or picnicking with your close ones? How close are nearby towns and other amenities? All these are factors that could affect the land’s cost.
3. Ease of Access
A vital factor in determining how to value land for sale is the ease of access. We know that some properties are in the middle of nowhere. That means there’s no road (or it’s in poor condition) or stores miles from the location.
If the buyer wants the property for leisure, ease of access to their car is imperative. But if someone plans to use the land to build something, it’s vital to consider how easily machinery can access the property.
4. Utilities Available
Is there water access on the property? If the answer is yes, that will immediately increase the land’s value. The same goes for other utilities, such as a septic system or electricity.
It saves the buyer time and effort if they don’t have to go through the tedious process of securing utility systems on the property. If you are looking for the best strategy on how to value land, any upgrade installed can increase its overall price.
5. Timber Value
For some users, the land’s timber potential is imperative. For example, what type of wood is on the property? Is it pine or a combination with hardwood, and did you plant it, or was it there naturally?
While we are there, let’s mention that the timber value can also affect wildlife. If there’s wildlife on the land, that could attract hunters, which implies you might sell the property as hunting land.
Other Factors That Affect Land Value
The list of small factors that can help to determine land value is long. Here is a quick overview of other things to consider when setting the price:
- Topography – are there hills, creeks, or rivers on the property? All these could affect the cost positively or negatively.
- Zoning – consider the zoning and other legal documents for your property. Will the future owner have to change the zones? That could decrease the land’s value. On the other hand, having 100% clear paperwork is a point to your favor.
- Fees – depending on the location, each landowner needs to pay certain fees. The higher these charges are, the lower the potential selling price.
- Historical value – is there any specific cultural and historical value for that land? You could use that to increase the cost when selling the property.
If you are inexperienced, it might be tricky to determine the land value properly. You can always assess similar properties nearby. If that’s not an option, consider contacting a professional to help you with setting the price.