I have been working mostly in residential real estate for the last 5 years in the phx area the other day I had a client call me to sell some land that they had bought many years before. Ive been having some difficulty comping out the piece of land as this particular property has all utilities already set for the property ( water, sewer(not septic) and electric) and most of the land properties do not have this, does anyone know how much it generally costs to get these items set up?
I'm not sure how your county tax office works, but in Dallas values are broken down by land value & value of improvements. For vacant lots, I usually start with the tax value as a point of reference. I've found the tax office actually does pretty good with land, because it isn't based on condition of the actual property, just the location & surroundings. So, if the land is in close proximity to other developed land, you can begin to get a idea based on the value of the surrounding plots.
As far as how much it takes to bring utilities to a piece of raw land, it is entirely dependent on the area you're in and the distance from the last point of active utility to where you need the utilities to terminate on the land. We had 5 acres and it was $2000, because the county water line ran right down the frontage road to the property. It was about a 20 ft connect and in a VERY rural area.
I'm new to BP but I've been buying and selling vacant land across the US for the last few years and here's what I do.
I would first go to the Maricopa County Assessor's website and see what they have the value assessed at and then call them to find out the relationship between their value and market price. Many assessors will have a lower value than market. Especially in a rising market like we are in. This will give you a ballpark idea.
Then I go to a website like realtor.com, or since you are a licensed agent you could just use the MLS, and search for recent sales in the area. If there are enough then this will give you a pretty good idea what the market values the property at. If there aren't enough sales then you can see if there are any listings and discount those listing prices 10% to 15% to get a rough value.
Obviously, improved property with utilities in place has more value but how much is subject to many factors. Like what are the impact fees or costs to connect to those utilities when you build.
And as an agent you already know that there are macro issues as well like the surrounding neighborhood, future development, zoning, easements, condition of the property, etc. that all can nudge the value one way or another.
And once you've done all that then take a quick look at the type of deed the property has, whether there are any liens on it, any special or upcoming assessments and are the taxes current. After all this, you should have a pretty good idea of what the property is worth and then price accordingly.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing