Appraisal Articles 2019 Free Appraisal Articles for Appraisers and the Public
It doesn't take an advanced degree in real property to figure out that there is a relationship between the number of acres for sale or sold and the price per acre. Vacant properties generally fall into loosely described strata that include; user home sites, small multi-lot sites, subdivision sites and large or master plan community sites.
In the Las Vegas residential land market for example if you are buying a small property, like an acre or less, you are likely buying a home site for current or future development, and you will probably pay the highest price per acre of all residential land buyers. Individual home sites are relatively difficult to find in Las Vegas and Henderson, NV because builders develop homes on their own home sites. So, unless you are looking for a site for a custom home you will find small lots hard to find.
Larger properties, about 2 to 10 acres in size, are usually too big for most home site buyers (at least in Vegas) and they are often purchased by small
builders or investors. The value of sites within these particular strata is usually associated with location and zoning, and value is usually lower on a price per acre basis than individual home sites. Many properties of this size lack some offsite development. If power, water, sewer and roads are lacking it can be quite expensive to develop a property in this stratum.
Residential properties that generally fall in the 10 acres to 40-acre range are large enough for commercial home construction projects and are often purchased by investors or home builders. Properties larger than 40 acres are often purchased by corporations or builders who develop master-planned communities and sell tracts to builders. On a price per acre basis these sales generally have the lowest price but the money that must be invested in planning, engineering, infrastructure development and sales is substantial.
So vacant residential land buyers typically face a list of offerings that often spans a relatively large number of different sized properties with a wide price range per acre with larger properties appearing low when compared to the per acre price of smaller sites. Unless you are very sophisticated and have a firm understanding of the vacant land market in the area, the risks of loss, zoning, planning, overlay districts, infrastructure improvements, value via allocation, topography, drainage, soils and related issues you don’t belong in the vacant land market.
You may be a programming wizard or an MD summa cum laude from Stanford or Harvard but if you are new to the real estate game then you need to step back and take the time to understand it. It’s like anything in life, you may think you understand something until you find out the hard way that you really don’t. Only in vacant land you may be out millions so it can be an expensive lesson.
Few people in Nevada understand just how powerful the federal government's participation in the vacant land market is. If they start their engines and begin to pump land into the market your paltry offering could be lost in the fray. The federal government has title to literally millions of acres of vacant land surrounding and within the boundaries of Las Vegas that they can decide to dispose of whenever they feel the timing is appropriate. Can you imagine how easily they can turn a shortage of land into a glut of land. It doesn't take that long.
I think retaining an attorney that specializes in real property is a must for investors. If they miss something they can often go back and fix it while you cannot. There are very few “take backs” in real estate, if you do something it is usually not undone.
For more appraisal information contact Glenn J. Rigdon MA, MRICS, ASA is a Las Vegas / Henderson Nevada based appraiser who can be contacted via email or via his business website known as Appraiser Las Vegas (http://www.appraiserlasvegas.com), or you can also click on “Contact Us” on the home page of this website or visit my public profile at LinkedIn at http://www.linkedin.com/pub/glenn-rigdon-ma-mrics-asa/1a/30b/879/
Article source: http://www.appraisalarticles.com/General-Real-Property-Topics/General-Real-Property-Topics/General-Real-Property-Topics/Investing///4665-Vacant-Property-Size-versus-Sales-Price-Per-Acre.html
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