Since we are heading into the selling season, I want to talk briefly about land values and why they are so important when you’re looking to purchase a home.
There are two components to every property as far as value goes: the land and the actual structure of the house. A lot of people I work with – especially first time home buyers – focus on the physical house and its cosmetics. They are first and foremost concerned with windows or layout or furnace age, to name a few things. And while these are undeniably important, oftentimes what gets overlooked is the land value itself.
Sometimes buyers will pass up great opportunities to buy a home in an awesome neighborhood simply because it didn’t look the way they were hoping it would. But there are really smart opportunities to take advantage of if you consider land as one of your primary focuses; if you’re looking for a home in a lower price range (under $150,000 or $200,00), then the key is to find lots where you think the land is going to do very well, then work to either remodel or rebuild a home that is more to your liking. While home styles come and go and rooms can easily be changed or updated, land remains steady and if you buy in the right location, it will be worth a lot more in the long run.
So when considering land values, you want to think about several factors and find something that’s got a 40 x 128 lot in a good location that is cheap and has the ability to buy and build new on. Is the land sloping, or is it flat? Where is it? Is it on the corner? Is it by a bus stop? Is it wide or skinny? These can all affect value in addition to the actual house itself.
As we move into Spring and the market starts heating up, don’t get discouraged by high prices and competition; keep your options open and make sure to consider long term land value as part of your search. You might be surprised with what you can find.