Investment Land Feasability
- Land Location |
- How to Buy Land |
- Land Features |
- Investment Timing |
- Opportunity Costs |
- Community Acceptance |
- Single Lot Investments |
- Residential Lots |
- Speculative Lots |
- Lease vs. Resale |
- Building to Suit |
- Acreage |
- Acreage for Resale |
- Land Evaluation |
- Land Promotions |
- Land Bankers
Land Acreage
Investors in raw acreage can be classified as either speculators or developers, as can purchasers of small lots.
A larger land parcel can be bought for resale as a single unit or for subdividing into either improved or unimproved lots. In the former situation, the investor acts as a speculator, holding the land for growth in value, then selling the tract intact.
When raw acreage is subdivided, the investor who sells the land in small parcels after few or no improvements have been made is speculating in land promotions, whereas the subdivider who improves the raw acreage with roads, sewers, water, and other utilities and amenities before selling lots is a land developer.
Land is often worth more as one wholly integrated and cohesive unit than it is as a number of individually owned separate parcels. This concept is called agglomeration, plottage or assemblage.
To apply this principle of ownership and value, a major farming or ranching enterprise would seek to control as many adjoining acres as possible to attain more efficient production.
Similarly, the total of the individual values of lots in a block could be worth less than the entire block as a single site for a large shopping center. In this case, the value increase is a function of a change in use as well as the efficiency of single ownership.
Plottage can have a reverse effect on the value of acreage for speculators and developers.
When quantities of land are accumulated for investment purposes, the total value of the individual smaller parcels is usually less than the value of the total property when finally acquired. However, if the speculator or developer decides to subdivide this wholly owned property, the sum of the sales prices of the individual lots often greatly exceeds the value of the property as a single unit.
This concept will be examined in the next chapter in a discussion of conversion of rental apartments into condominiums.
- Land Location |
- How to Buy Land |
- Land Features |
- Investment Timing |
- Opportunity Costs |
- Community Acceptance |
- Single Lot Investments |
- Residential Lots |
- Speculative Lots |
- Lease vs. Resale |
- Building to Suit |
- Acreage |
- Acreage for Resale |
- Land Evaluation |
- Land Promotions |
- Land Bankers
