How do you evaluate a piece of land?

Question

I came across a parcel of campground land that I'd like to purchase.  It's 50x80 feet.  It has access to electricity, fresh water, has a road that leads up to it and has a lake view and has been used for camping.  The problem is that I don't know how to evaluate the value so I can make an offer.  Can someone offer me guidance on how to evaluate this deal?   Thanks.

Tanner Sherman · Answer

Jessica,

One thing I have done is contact developers in my area as well as land appraisers to try and understand how they valuate raw land. For example, there are multiple levels of land development, starting with raw land that needs to be cleared, rezoned, leveled, connected to city utilities, ready to be developed, etc. And at each tier the property has a completely different value. Yours sounds like it is further along in the process than land that needs to be cleared so a real estate broker in your area may be able to find comparable properties to give you an idea of what you should offer.

Bill B. · Answer

Is “access to fresh water” city water or a well? We had problems with a much larger parcel for a 700sf cabin because the septic access has to be 50 feet away from the well and the lake, and the house has to be 50 feet from the water. You run out of “50 feets” pretty fast. We only succeeded because there were no easements next to the road. Our septic clean out is literally within a foot of the road. Combined, with a diagonal we wee over 50 feet, under 51 feet.

Jessica Howard · Answer

@Jonathan Klemm thanks for adding a reply.  I've looked at the area and not much has sold in the immediate area, but I've found a few land sales a little further away.   I'll reach out to a commercial broker.  The RE agent I reached out to put out some feelers and I suspect folks are off enjoying the holiday as they should.   I haven't heard back yet.

As for my plans, I'm thinking it would be a good lot for a tiny house.  The area has a camping season and there are other STRs in the area.

Jonathan Klemm · Answer

@Jessica Howard - Sounds like you are already on the right path!

As far as a tiny house goes, how much does one of those cost to build?  Or do you get it shipped in?

Jessica Howard · Answer

@Dallas Hayden What's a topo?

Here's a bit more information.  The lot is 4K and it's 3500 sq ft. It's been used by the previous owner for camping pitching a tent, etc.  There is a restroom and playground nearby.  Another option could be to rent the space out and campers can bring their own set up.  Has anyone had a similar situation to consider?

Dallas Hayden · Answer

If you can, definitely visit the property or look at a topo to check on the grading. Sewer/septic is critical. If you don't have sewer access and can't build septic, you might not be allowed to build a home on the lot (regardless of what the seller says). Or you may be stuck with one bathroom. That may be why the lot is still available. I suggest figuring out what your goals are with the lot and determine whether they are achievable. Ex- Are you happy paying $40,000+ for a small lot you can camp on but cannot build on? Can you cost-effectively source materials?

Jessica Howard · Answer

@Dallas Hayden I dont know the grading, but the seller says I can build a cabin /place a camper and they may stay all year round; there are other year round residents.  Don't know about sewer/septic on property.  The electric is at the poll right next to the property needs to be hooked up to a power meter. @Bill Brandt it is near a lake but I don't know how many feet away yet.

Dallas Hayden · Answer

Great point. I purchased a 6000 sq ft lot that's barely large enough in a perfect world for drip septic to support a 3/2. There are numerous factors that play into the suitability of a lot, especially when the dimensions are tight.

Dallas Hayden · Answer

Most importantly, what can you do with the lot? What are the restrictions on this particular lot? What is the grading like? Can you build a house? Place a MH? What about sewer/septic? Here in TX 50x80 is typically too small for an OSSF. Is the water view year-round or only seasonal? What about lake access?

Jonathan Klemm · Answer

@Jessica Howard - Can you look at what other land was sold for in the area?  I know here in Chicago/Illinois the MLS will show land that is sold.

I'd also just suggest talking with a commercial broker, they should have access to co-star or something along those lines that can provide all that data.

What's your plan for the land once you purchase it?

How do you evaluate a piece of land?

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