How to Increase the Value of Vacant Land
On the surface, selling a piece of vacant land may seem straightforward, and in some cases, it is. However, more often than not, maximizing the value of land requires strategic planning and an understanding of the many variables involved.
Understanding Zoning and Its Impact on Land Value
Vacant land can serve various purposes, each governed by zoning regulations that impact its value and marketability. If your property is located in a remote, sparsely populated area, zoning may be less restrictive. However, in most cases, zoning ordinances will determine how the land can be used, ultimately affecting its worth and ease of sale.
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We often hear the phrase, "Location, location, location." While location is crucial, the second most important factor when determining a parcel’s value is "Zoning, zoning, zoning." While aspects like scenic views, proximity to desirable amenities, and unique land features can drive market demand, the inability to use the land as intended, due to zoning restrictions, can significantly diminish its value.
Zoning classifications influence whether a property can be divided into smaller parcels, how much each parcel is worth, and the complexity of selling them. Understanding these regulations before listing your land for sale is essential.
Case Study: Enhancing Value Through Strategic Land Use
To illustrate the challenges and opportunities in selling vacant land, consider a real-world example. We recently assisted a property owner in maximizing the value of their existing home and its surrounding 4-acre parcel.
When a property can be divided into multiple parcels, the combined value of the individual lots often exceeds the worth of the original, undivided land. However, the process of creating this value requires careful planning, financial investment, and an in-depth understanding of municipal zoning ordinances. Factors such as required road frontage, minimum lot sizes, and infrastructure requirements significantly impact the feasibility of land division.
In some cases, a "halfway" approach exists. If a favorable zoning classification allows for more intensive development, it may be beneficial to conduct preliminary feasibility studies to attract a developer willing to purchase the land at a premium. Under certain circumstances, developers may be willing to assume the risk of securing approvals, which allows the seller to achieve a higher sale price.
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Steps Taken to Maximize Property Value
In this case, the landowner took proactive steps to unlock the property's full potential. Our process included:
Reviewing Land Split Availability – Conducting an analysis under the Michigan Land Division Act.
Zoning and Ordinance Study – Researching zoning classifications and meeting with township planning officials to verify regulations.
Aerial and Environmental Analysis – Examining parcel data, wetlands, flood zone and vegetation maps.
Site Planning – Preparing multiple site configurations based on ordinance requirements.
Surveying and Soil Investigations – Conducting a boundary survey, topography, preliminary lot split, and soil tests for on-site sewage feasibility.
Cost Estimation – Assessing preliminary road and improvement costs.
Developer Outreach – Contacting local developers to explore purchasing opportunities.
Ultimately, these steps led to a successful sale, with the landowner securing a higher value than initially anticipated.
Creating Value Through Knowledge and Preparation
Land development can be complex, but hiring the right real estate expertise, and taking the correct steps, can significantly increase a property's worth. By understanding zoning laws, conducting thorough feasibility studies, and engaging with buyers who are positioned to pay the most , landowners can maximise the value of their property.
If you are involved in a similar situation, or are interested in learning more about maximizing your vacant land’s value, please contact Kevin Moore at 616-318-1322 or email contact@expectmoore.com. Explore our site further and join our email list for more expert insights on land development and investment strategies.