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4 Things That Determine Land Value
What is my Land worth?
What all is factored in when coming up with a value?
Is there anything that I can do to improve the value?
All of these questions are extremely valid, but much simpler than you may guess. There are 4 leading factors that determine the value of an acreage. They are as follows:
1. Location, Location, Location
Whether you learned it in school or heard it throughout life, location is arguably the most important factor in property/acreage value. People naturally want to live close to others and more times than not people like to live in dense areas. The more dense the area, the more businesses, grocery stores, movie theaters, etc. will locate there and you won't have to venture out too far for necessities or entertainment.
Why Should I Care?
Obviously, you can't just pack up your land and move to a more desired location, but you can keep in mind the location of your property when determining value or a game plan. Maybe the lot is located in a rural area, but you are sure that the town will boom in population in the coming years. Maybe it would be a good idea to hold onto the property a little bit longer and cash in when the time comes.
2. That Million Dollar View
Ever heard of a "million dollar view"? Chances are, you have, and there is good reason. Buyers pay a huge premium to have a nice view from their property. Whether it's hillside, poolside, or mountainside, everyone wants a view and will pay accordingly.
Here's the kicker though, everyone has their own idea of a "million dollar view". Some people like looking over water, some hate it. Others like to see trees out in the distance, and some like to see inside their neighbors window.
Why Should I Care?
One man's trash is another man's treasure. That is a common saying for a reason. Some may not like a lake view property, but others will love it. Don't sell your property short if it doesn't have a view that everyone may love. It's so important to really drive what view it does have to get a potential buyer excited about waking up to that every morning.
3. Size Matters
Obviously, the more acreage, the more your property will be worth. That being said, there is a typical "sweet spot" for a property that buyers are looking for. It widely varies, but a typical home owner will want a lot that is anywhere from 1-5 acres. Lots these size are great for a nice sized home to be built and provide a little seclusion, but also small enough where it is easily managed by one or a few individuals.
Why Should I Care?
If you're holding on to 20+ acres, think about splitting it up. Your lot will become a lot more attractive to potential home buyers if the lots are made up of 1-5 acre tracts that are much more manageable.
4. What Your Lot Looks Like
When an individual or family is looking for land (usually to build a house), they want a relatively cleared lot. Maybe with a small pond, maybe a well, or a sewer system. The easier it will be for them to build a home on the lot, the more attractive it will be and the value will skyrocket.
Why Should I Care?
There are certain ways to provide extreme value to your lot by doing minimal and inexpensive work. Say your lot is full of trees: take a Saturday and do some clearing. You can truly add $10,000+ per acre if you clear some trees and show the true beauty that your lot provides.
What if you lot is too clear? Plant a few trees or bushes. They don't have to be massive; just a little added greenery will do wonders to your value.