Understanding the Land Market – How to Maximize Land Values

Understanding the Land Market How to Maximize the Value of Your Property

Everyone wants to have a place they call home, and buying or selling a piece of property is one of the ways to find your dream home. But owning property is more than just having a typical three-bedroom, two-bath home with an attached in-law suite. Some real estate owners own land that is vacant without any improvements.

When it’s time to sell your land, you’ll need to do more than stick a “for sale” sign in the ground if you want to get the highest price. Here, we’ll look at factors that affect land value and suggest ways to improve your property so you can get the best possible price.

Understanding the Land Market 

One of the toughest questions landowners ask when considering whether to put a property up for sale is, “What’s it worth?” Valuing real estate with an existing building is pretty straightforward–valuation is determined by the income it produces or by looking at comparables in the area which have recently sold.

Market trends and factors affecting the value of land

Stock markets, inflation, and high employment can significantly impact the value of everything, including land. During the recent pandemic, where and how people live and work changed dramatically. Many were allowed to work from home, and commute times and distance no longer factored into workers’ geographic locations. As a result, land in once stagnant markets was purchased and, combined with historically low-interest rates, made prices soar.

Other factors, including location, zoning requirements, and local demand, affect the value of land, and we’ll explore them below.

• Location and accessibility – If you’re hoping to sell your land for maximum profit, your location will probably be the most significant factor if buyers choose to walk away. If folks are looking for oceanfront property but you’re 45 miles inland, it might take longer to find the right buyer. It’s the same for accessibility–meaning land that is difficult to reach, whether it’s miles outside the city or requires a four-wheel drive to get up the driveway, can be difficult to sell.
• Zoning and land use regulations – Local governments usually dictate zoning requirements and have a say regarding how your property can be used. Specifically, if you own land in residential areas and want to create an amusement park, government zoning boards will decide whether or not to issue the permit to proceed with construction.
• Demand for land type (residential, commercial, agricultural, etc.) – Single-family home construction continues to dominate the market, but multi-family properties are on the rise in many markets. Additionally, commercial properties remain hot as developers continue to meet the demands of a growing population looking for more restaurants and entertainment venues.

Researching the local land market

Another way to maximize the value of your property is by comparing prices of recently sold properties, otherwise known as comps. You can use several methods, including the “go it alone” approach, where you use online resources to perform market analysis or consult with local real estate agents, land appraisers, or land buyers who can give you a better feel for what the land market is currently doing.

Maximizing the Value of Your Property

Once you’ve researched zoning regulations and analyzed the local market, it’s time to highlight the finer points of your land and make it as desirable to potential buyers as possible. What is your property’s biggest selling point? Why would potential buyers choose your land over similar properties? Let’s highlight some of the answers to these questions in the sections below.

Improving the land’s physical appearance 

Making your property look its best not only makes sense when you’re attempting to sell it but also as a way of preventing accidents and wildfires. Depending on your location, clearing debris such as downed trees and underbrush can prevent wildfires from spreading to structures on your property.

Additionally, making necessary repairs to fences and roads will let potential buyers know they will have one less thing to worry about and could decide whether they choose to make an offer. Finally, if your land doesn’t have fences or other landscaping features, adding a fence row or even a pond can add thousands of dollars to the value of your property.

Marketing the property effectively 

The first line in your land listing should highlight your land’s unique features and benefits. What makes it extraordinary compared to nearby listings? Why did you buy it? Answering these questions goes a long way to ensure you get the most money for your land.

There are many ways to sell your property in today’s market. Utilizing multiple channels for marketing, such as online listings, open houses, and selling brochures left on-site, can reach more buyers and get the property sold quickly.

Our Final Thoughts

Selling your land can be challenging in a tough economic market. You’ll need to understand market trends, how to negotiate with buyers, and improve the appearance of the land to get top dollar. Working with a trusted advisor specializing in the land market is an intelligent way to ensure the price you receive for your land is fair and makes sense financially.