How to Determine Land Value
Many factors influence land value.
The common saying is that real estate is all about location, location, location. Location is important, but there are other considerations.
Zoning regulations or a celebrity connection can increase or decrease land value. Look beyond the tax rolls to more accurately determine the value of your land.
Use recent sales listings of comparable properties to determine the value of your land. When searching sales listings, look for properties of similar size and location. If a comparable property has an amenity that your property does not have, subtract the value of that amenity from the price of the comparable property to determine the value of your land. Add to the price of the comparable property, if your land has more amenities.
Research historical connections. Depending on condition, location and the specific type of historical connection, historical value can add dollar value to the sale price. Properties that are designated as landmarks are monitored by local landmark preservation agencies. Changes to the property must first be approved by the landmark preservation agency. This is sometimes viewed as a negative and can decrease the amount a buyer is willing to pay. Conversely, some historical connections, such as being the former home of a popular musician, could significantly add to the sale price for potential buyers.
Factor in zoning regulations. Zoning regulations dictate how land can be used, what kind of buildings are allowed and the size of the structures that can be built on the site. A vacant lot that is zoned for high-rise office buildings in a city's downtown is potentially worth more than a vacant lot zoned for a single-family home in a neighbourhood of ranch-style houses.
Determine geographical and topographical conditions. The exact location and topography of a property impact the value of the land and the cost of maintenance. For example, property in a floodplain requires owners to purchase additional insurance, which increases the cost of maintenance and could make development unprofitable. According to the National Flood Insurance Program, weather patterns, erosion and development affect floodplain boundaries. The official floodplain maps are maintained and updated by the Federal Emergency Management Agency.
Research proposed projects in the area. Major development plans in the area affect nearby properties. A new highway, a stadium, a park or any other major project has the potential to increase or decrease your land value. A new park could make young families interested in purchasing your property, while a new highway could deter those same potential buyers.
Visit the property at different times to determine if there are any noises, sights or smells that could affect the value of the land. Use the local library and historical societies to research the property's history. Contact the local city planning department to obtain a copy of zoning maps and regulations.