Oceanside, NY · Member since 2014 · 8 posts · 0 votes
Im curious to know if there is some way to figure out the value of vacant land. I found a vacant lot, 100x100 with possible sub-division into 2 50x100 lots.
I'd like to hear what you guys may suggest or what you think of this. Thanks!
@Nick Capriotti There is no formula, every market is different. What is the overall real estate market like in your area? What are the values of homes in the neighborhood where the lot is?
Talk to a civil engineer that can look at the lot, and knows what the requirements are in your town for splitting property, what setbacks are required, etc., and ask him if it is feasible to split the property, and what the total amount of costs would be.
Once you have that information, you will be in a position to know if it's doable.
Percentages that other people can or cannot do in other states, or even other areas of your state mean NOTHING. Find out specifics for your city, and even neighborhood!
Comps are usually hard to come by. You have to use those nearest to you. In my market the assessed value is usually the price that is anchored in my customers minds. So we usually end up pretty close to the assessed value. In town you may find more comps though.
Here's a way to look at the numbers for new construction and determine what you should pay for the land. In this example, I show how I back into my land cost. Of course, your ratios, costs, and details will be different, but this gives you the structure to evaluate everything.
I look at surrounding newly finished homes and assume that the land value is 18%-20% of the sales price. This may not work everywhere but rings true in suburban Atlanta. Hot Intown areas will be higher- based on supply and demand.
20% of the gross value of what can be built on it minus whatever it takes to make it buildable, like water and sewer taps and any other utility cost or cost
@Nick Capriotti There is no formula, every market is different. What is the overall real estate market like in your area? What are the values of homes in the neighborhood where the lot is?
Talk to a civil engineer that can look at the lot, and knows what the requirements are in your town for splitting property, what setbacks are required, etc., and ask him if it is feasible to split the property, and what the total amount of costs would be.
Once you have that information, you will be in a position to know if it's doable.
Percentages that other people can or cannot do in other states, or even other areas of your state mean NOTHING. Find out specifics for your city, and even neighborhood!