Investor · Cary, NC · Member since 2015 · 71 posts · 26 votes
I own two lots as in the survey attached. One a has a little house on lot 4 which is rented, and long lot 5 which shows gravel parking is empty lot. I get offers from builders for the vacant lot but they don't want to buy the both the lots. I have been refusing sale of only empty lot because then little house will sort of lose its "yard" and what gets constructed on empty lot might reduce property value of a house which is small and not updated. I feel like if I sell lot 5 it will become very hard for me to sell lot 4 alone. I do want to sell both of them.
But thinking now if anyone thinks there is a reason it might be in my interest to sell vacant lot alone, and try to make a deal.
Assessment for both the lots have increased and I have been paying property tax on vacant lot when it does not generate any income.
The bigger issue is that it appears you have an encroachment where the smaller lot appears to have some sort of deck or steps that might intrude upon the other lot. Also, does that house meet the setback requirements? I assume it does, or it is grandfathered in. If it does, then I don't see a reason why you would not sell that other lot, as I don't believe the value of that property would decrease significantly, or more than what you're getting for the lot.
It's in a city, very close to a community college. Everywhere except that road is getting gentrified. There are some old duplexes on that road, and not much new build yet.
County just reassessed vacant lot to 130k, 219k for the house, but I think they comp'ed these with recently flipped areas not very far from there, since it's hard to find similar sales.
I have not really negotiated with anyone seriously, I have been just telling anyone who approaches me 450k for both and they run away.
Since it's direct call offers it been around 50-60k for empty lot which I wouldn't accept.
The lot behind the small lot is very big too, does not have road access. Builder who owns that also contacted me for the empty lot, because he wanted to use my lot for access. He really low-balled, I wasn't serious at that time to sell so I didn't do much to make a deal.
But now starting to think about selling seriously. Rent for the house is $1150, I have dome equity in house which I can invest elsewhere and get more rent.
Hi @Mona V., welcome to BP! From a lender’s perspective, your instinct is likely correct: in many cases, the combined value of both parcels is greater than the value of each lot sold separately.
The vacant lot certainly has standalone value, but it may also provide important utility and marketability to the improved parcel. Once you separate and sell Lot 5, the house on Lot 4 could lose:
Yard space and privacy
Parking flexibility
Future expansion potential
Overall appeal to a broader buyer pool
That could materially reduce the resale value of the house and make it more difficult to sell later.
When selling the vacant lot alone may make sense
There are situations where selling Lot 5 separately could still be beneficial:
The offer is strong enough to offset any potential decline in value to Lot 4.
You want to eliminate carrying costs, such as property taxes on a non-income-producing parcel.
The remaining rental still cash flows well and continues to meet your investment goals.
You have no plans to redevelop both lots together.
You can negotiate protections, such as deed restrictions or architectural limitations, to help preserve the value of the existing home.
Consider the highest and best use
Before deciding, it may be worthwhile to evaluate:
Whether both lots together are more valuable to a developer than individually
Whether the house is contributing meaningful value, or if the real value lies in the land
Whether redevelopment of both parcels would maximize proceeds
In many urban infill markets, the greatest value may come from selling both lots together to a builder who can fully redevelop the site.
A lender’s view
When financing land or redevelopment opportunities, lenders focus heavily on:
Zoning and allowable density
Combined lot dimensions
Highest and best use
Exit strategy
If both lots together create a more attractive development opportunity, that often supports stronger valuation and a larger buyer pool.
My opinion
If the rental home still performs well and the combined site has redevelopment potential, I would continue marketing both lots together unless the offer for the vacant lot alone is compelling enough to more than offset any reduction in value to the improved parcel.
It may be worth obtaining:
A broker opinion of value for Lot 5 by itself
A valuation for both lots together
An estimate of the post-sale value of Lot 4 without the vacant lot
Once you compare those numbers, the decision becomes much clearer.
Sometimes paying taxes on a vacant lot feels inefficient, but if that lot materially increases the value and flexibility of the overall property, holding it may be the better long-term strategy.
I am inclining towards sticking with selling them together.
Glad that helped—selling them together is often the strongest outcome from a value and buyer demand standpoint.
If you’d like, we can also support on the financing side for future opportunities, whether it’s acquisitions, redevelopment, or investment strategy analysis. We work with investors regularly to help structure deals and evaluate exit options before they go under contract.
Feel free to reach out anytime on anything you’re working on down the line.
The bigger issue is that it appears you have an encroachment where the smaller lot appears to have some sort of deck or steps that might intrude upon the other lot. Also, does that house meet the setback requirements? I assume it does, or it is grandfathered in. If it does, then I don't see a reason why you would not sell that other lot, as I don't believe the value of that property would decrease significantly, or more than what you're getting for the lot.
Thanks, good point. House is old and these two lots have always been sold together before, my guess is same as yours, either or does meet the requirements or is grandfathered in.
