The feasibility studies are essential of land investment to estimate the profitable of the investments. What is profitable for one owner may be is not to the other, for example; a sloping land which is inefficient for farming but is desirable to build homes with attractive views.
The location and topographic conditions of the land are extremely important to success of this kind of investment. The investor must be consider the timing project schedule, farming losses, building cost and the specific city develops plans to the area.
The advantages of investing in a single residential lot with the proposes of build a house is acquiring the home-site at current cost and/or purchasing a speculative lot base on the possibility of rezoning for more intensive different use. Purchase a residential lot with rezoning potentials substantially raices property's value. It is common for a property to double or triple when a residential property rezones to commercial use.
It is better to lease these properties rather than sell. A lease gives more advantages to the owner by secure a long-term income, plus the improvements made by tenant and lather sell the lot at higher price. Because land is not depreciable for tax purpose, is recommendable to a beginning investor to start with improved income property.
In addition two this investment many persons speculate in vacant acreage and await profits through growth in value. Investors in raw acreage have two principal options, to resale the land as one unit or subdividing the land and sell by parcels, in both options they can made improvements to speculate in land promotions. When the acreage is subdivided the land is selling in small parcels promotionally by with infrastructure improvements utilities and amenities.
Land is offer worth more as one integrated and articulated unit than it is as a number of individually owned with separated parcels. This concept is called agglomeration, plottage or assemblage. This principle increase the value or utility as resulted of assembling two or more adjacent lots into one larger lot. Investors applying this concept to obtain more effiente production in farming or to individual values of lots in a block worth less than the value of the block as a single site for a large shopping center. This principle can have a reverse effect, so the investors made a final decision based on every specific case
