It's no news that real estate is a juicy investment plan when maximized fully. Unfortunately, land ownership is a real estate field several investors neglect. Raw land is loaded with numerous potentials and opportunities. At will, you can increase your land value and diversify the property to get massive income.
Most times, investors consider raw land a burdensome responsibility. Yes, land ownership will require some effort and input from you, as the owner. However, when the outcome of your efforts shows up, your land value increases massively.
In this post, we will show you what land value is and how to increase your land value. We would also arm you with the factors that affect land value and how to maximize them. Without taking time, let's get started with what land value is all about.
What is Land Value?
Simply put, land value refers to the monetary recompense of any landed property. It describes the amount of money buyers are willing to give in exchange for a landed property.
In real estate, land value is generally used to describe vacant plots. However, when there are structures on the land, the term “property value” is more relevant.
The land value of any plot is determined by the best use of the land which will generate the highest return on investment over some time. On the other hand, property value is dependent on the land rates, land location, structural attributes and land rates.
Factors That Affect Land Value
The factors that affect your land value play a significant role in the selling price of your land. Even though these factors may not give the accurate selling cost of your land, they help give a cost estimate.
Several factors could affect your land value. In this segment, we'd be considering the factors that affect your land value directly and indirectly.
1. Accessibility to Economic Activities
The accessibility of land to economic activities is directly proportional to the land value. By implication, the more accessible the land is to economic activities, the higher the value of the land.
Lands that are closer to the centre of the town have greater land value than lands at extreme ends. The reason is not far-fetched. Commuting to various parts of town from lands at the centre of town is easier than commuting from extremes.
Additionally, several businesses and companies are usually located in the centre of town. Hence, propelling several people to want to get the land.
2. Neighbourhood Amenities
Lands that are close to malls, markets, schools, hospitals, major companies and the happening parts of town often cost more than lands in rural areas. As such, increasing the value of land intended for sale starts at the purchase point.
Sometimes, the land may be surrounded by bushes and undeveloped lands. However, you could project the environmental development of the area by observing the master plan of the area.
Usually, the area master plan contains the projected structures for the area. You could obtain it from the local government or better still, a registered surveyor could help you get it.
3. Present and Future Land Use
While discussing neighbourhood amenities, we mentioned the importance of studying the master plan before purchasing land. Doing this study is one of the greatest advantages you will give yourself.
The present and future land use of a plot of land can restrict the land value of a plot of land. For example, lands that are usable for commercial purposes will always have a greater value than lands that are restricted to residential purposes.
People will be willing to pay more for lands that can serve commercial purposes. This is because the return on investment for lands that serve commercial purposes is higher than the return on investment for residential lands.
4. Physical Attributes of the Land
The physical attributes of land play a major role in the cost of the land. These physical attributes include the quality of the location, topography, climate, availability of water and several other factors.
Topography, for one, has a direct impact on construction costs and the overall development cost of a property. Consequently, buyers will prefer plain land to hilly surfaces except it is essential to opt for the land in the hilly location. As a result, you should consider all these factors when purchasing lands you intend to sell.
5. Real Estate Prices
Aside from the aforementioned factors, market prices could affect the value of your property. Most especially, in major cities. Hence, you could get an idea about the possible land value of your property by sampling land prices in the locality. These prices could also help you determine whether to sell at that time or wait a while before selling your property.
How to Increase Your Land Value
Increasing your land value is a great way to improve its usefulness, and increase the return on investment. Furthermore, it could help speed up the rate of sale of the land when the time comes.
Before you commence improvement of your land value, it is essential to know the best uses of your land. Knowing these will help guide the improvements you make and help you maximize your real estate investment. Below are some of the ways you can increase your land value.
1. Provide Access Routes to the Land
Paving Access Routes to your land is one of the cheap ways to increase your land value. Potential buyers won't pay attention to a property they cannot access. First of all, the absence of access Routes sends a signal that it will be difficult for them to gain entry to their homes or companies in the near future.
Secondly, it signals to them that purchasing the land is synonymous with signing up for stress. Hence, providing access Routes to your land is one of the ways to increase your land value and motivate potential buyers to acquire the land.
2. Maintain the Soil Health
In an environment that predominantly favours farmers, one of the greatest ways to increase your land value is by maintaining soil health. Before making any decision or carrying out any activity on your land, you should conduct a soil sample on your land.
Conducting a soil sample will inform you about the current of your land. Additionally, it will help guide you on actions that will improve the state of your land.
3. Survey Your Land and Ensure All Your Land Documents are Available
Having the land survey handy is one of the ways to increase your land value. It gives the buyers rest of mind and shows the property lines. Consequently, it helps the buyers to utilize the land.
Similarly, having complete and accurate land documents gives the buyers a sense of security. It helps them trust the authenticity of ownership and spurs them to buy the land.
4. Manage the Trees and Shrubs
If your land has trees and shrubs on it, be sure to watch out for the health of the trees and shrubs. Having healthy-looking trees will make the land look appealing regardless of the season.
Do not hesitate to eliminate trees infected by pests, because they will affect the perception of your land by buyers. Additionally, create attractive pathways through which you can easily navigate the land. These pathways will increase the land structure and make the land more organized.
5. Fence the Land
Landowners love to have a sense of exclusivity. Construction of a fence on a piece of land affords them that. Furthermore, it deters trespassers and protects the land from unnecessary interference. Hence, increasing your land value.
You could further increase the value of the land by adding a gate to the fence. That in itself serves as proof of the security of the land.
6. Build Structures on the Land
Structures like slab foundations, mini huts, taps and fences are helpful ways to increase your land value. These structures would be relevant to buyers of your property and could help bump up your land selling price.
7. Consider Utilities
Incorporating utilities into your land will increase your land value massively. If you would be unable to build the utilities on the land, research the best utilities that can be easily incorporated on the land. Knowing these would be a good selling point when you meet with potential land buyers.
8. Install a Culvert or Water Passages
Heavy downpours and erosion would damage your land severely and destroy the topography of your land. You can overcome this by installing a culvert and water passages. Doing this will protect your land from erosion. Hence, protecting the topography and health of your land.
Conclusion
Real estate is a field with numerous opportunities. If you are new to the field, you will find our guide, ABCs of Real Estate Investment, useful.
Land acquisition is a lucrative field with lots of benefits. However, you need to increase your earning power after acquiring the land. You could increase your earning power by increasing the land value of your land.
In this post, we examined the subject of land value and how you could increase your land value. Furthermore, we examined the factors that affect land value. If you need more real estate tips and counsel on navigating real estate, be sure to check out our blog. At Land Republic, we are committed to helping you navigate the real estate space. Do not hesitate to contact us or call +2348122222283 today.
