How to determine the value of land before investing

Investing in land can be an excellent opportunity for those looking to build wealth. With over a decade of experience in real estate, I can say firsthand that this is by far the most lucrative field to be involved in today.

‍

However, like any investment, it is crucial to conduct thorough research to determine the value of the land before making a purchase. By doing so, you can ensure that you get the best return on your investment. In today's blog post, we'll discuss some important factors to consider when determining the value of land before investing.

‍

Location

Location is one of the most critical factors to consider when determining the value of land, as it plays a significant role in its overall market price. Land that is located in a prime location, such as near a major city or tourist destination, will typically have a higher value than land in a less desirable location. Additionally, land that is near schools, hospitals, and other important amenities will also have a higher value.

‍

When looking through the lens of light industrial real estate specifically, ensuring the land is near a residential area with plenty of homes (at least 900 homes within five miles) is a general rule of thumb I like to use.

‍

‍

When considering the location of the land, it's essential to research the area's potential for growth and development. If the area is experiencing growth — through the addition of new homes, businesses, etc. — the land's value may increase over time, making it an excellent investment opportunity. On the other hand, if the area is experiencing a decline, it may be best to look for land elsewhere.

‍

Zoning

Understanding zoning laws is crucial when determining the value of land. Zoning laws regulate how land can be used, such as residential, commercial, or industrial use. Typically, land that is zoned for commercial or industrial use will have a higher value than land that is zoned for residential use. Additionally, land that is zoned for multiple uses may have a higher value than land that is zoned for a single use.

‍

When considering the zoning laws, it's important to research any potential changes to these laws that may impact the land's value. For example, if the area is experiencing growth, there may be changes to the zoning laws that allow for more commercial or industrial use, thereby increasing the land's value.

‍

Physical characteristics

The physical characteristics of the land are also important when determining its value. The size of the land, the topography, and even the soil type can all impact the value of the land. For example, land with fertile soil that is suitable for farming will typically have a higher value than land with poor soil quality. Additionally, land that is flat and easy to develop will typically have a higher value than land that is hilly or has other physical obstacles.

‍

‍

When considering the physical characteristics of the land, it's important to research any potential environmental concerns or hazards that may impact the land's value. For example, if the land has a history of flooding or is located near a hazardous waste site, it may decrease the land's value. This is why including a detention pond is a must in areas like Texas, where I primarily build flex spaces.

‍

It can’t be said enough — investing in land can be a great way to build wealth, but it's essential to research and determine the value of the land before making a purchase. By considering factors such as location, zoning, and physical characteristics, you can ensure that you're getting the best return on your investment.

‍

To ensure a successful purchase, development, and investment, there’s a lot more to discuss. If you’re ready to learn from the best of the best, join me over at Flex Space Untapped — my team and I are ready to help you make the best investment of your life with flex space. We’ll help you learn the ins and outs of this amazing asset class so you can build an empire just like I did.

‍