What Are Some Simple Ways To Improve Land Value?

Working with what you have:

It’s obvious that adding improvements to any type of real property can enhance its value, as long as they are right for the property and correctly done. One way is to divide the land into multiple parcels (subdividing), but that is not the focus of today’s reading since there is nothing simple about that undertaking.

This is about working with what you have to enhance the market value of the land as it sits. Although the ideas put forth are simple in nature, any improvements to land can be costly. Before any money is spent to improve land, the corresponding return on investment should be evaluated.

Let’s create a scenario: You just inherited a 5 acre lot from grandpa that you’ve never seen and didn’t even know about. Nothing has been done to the property for decades. You found that out because you drove out and took a look and found that it’s thickly wooded and overgrown with brush. It’s hard to tell where the property starts and ends since there are no clear reference points. It’s a piece of dirt at the end of a rough gravel road.

Like many (if not most) heirs in a Will, you want to sell it fast and get some money but you’re not desperate; you want to get the most money out of the property that you can.

What should I do first?

Well, before an owner starts thinking about how to improve anything it’s a good idea to know what he actually has. In this case you have no history with the property, so the first place I would go to is the title report and deed. These documents will detail whether there is a survey, any recorded liens, the bundle of rights and obligations, and what deed restrictions come along with it. From there you get a starting point on what else you inherited along with the dirt itself.

All this can be done very economically. If you’ve rounded up a real estate agent he/she can secure a title report and copy of the deed for you (although you should already have it). Understanding the meaning of the contents is another matter for some folks, so you may need help. Some title officers are very skilled at accurately explaining title contents, but not all of them. That’s where a short consultation with a real estate attorney should occur. No matter how it is done, a landowner must fully understand the content of the title report and deed.

Why should I do this? There are many reasons, but let’s look at one really good example - access easements. Grandpa’s property may have an easement which is either dominant of servient. If a neighboring property has an easement across grandpa’s lot you should know about it. Likewise, if you could improve your access to the property you might be able to buy an easement. If you want to make a few bucks you might be able to sell an easement.

If you want to know more about easements take a look at this: https://www.landdevelopmentrealities.com/home/2019/3/28/what-to-know-about-easements .

Adding value to vacant land:

Improve the access:

My #1 suggestion.

This is really my # 1 improvement suggestion for a variety of reasons. Agents that specialize in home sales always talk about curb appeal for homes and it applies to vacant land as well. The access road into the land is the very first and last thing that a potential buyer will see and first impressions are important.

If the road is rutted and has encroaching overgrowth it presents an unkept and sloppy image. Notice the above photo that shows how the road (before paving) and road shoulders are properly graded. Also look at the near and far ends where the road shoulders and easement is brush cut and tended to. Would a buyer rather see this, or a rutted out and overgrown access point?

The average landowner might correctly balk at this kind of improvement as too costly. For minimal cost it is super easy to brush cut and spray road shoulders for a more open feel. Filling in the ruts in the road is also an easy and economical fix. If it is an existing gravel road, a landowner could look into the cost of trucking in and spreading fresh gravel for a needed facelift.

Identify needed utility extensions:

Bring in utilities.

Having inspected the land and the area around it, utilities not servicing the property can be easily identified, along with where the tie-ins would be. Utility runs are quite expensive as a rule, but there are inexpensive steps that can be taken. If grandpa’s lot lacks water, would drilling an individual well be feasible? You need to know the water use regulations before contracting with the drilling outfit. Sticking with household water, if the property next door has a home on it, then there will be water. What is its source? Maybe a tie in to a public water line is much closer than you know. Electrical power is essential and determining the location and cost to extend into the property is necessary.

Septic design:

One trick used on all of my non-sewer project lots is to provide an approved septic design. For a very minimal outlay vs the potential ROI, a landowner can have a perc test done and create a 3 or 4 bedroom septic design to be approved by the Health Department.

Be thoughtful about the drain field location since it should not interfere with the potential home site. On any MLS listing form there is always a checkbox section for utilities and the more boxes that are checked, the better as a general rule. Providing an approved septic design can add way more value to the sale than it costs!

Remove junk:

This is simple and economical for almost anyone. Brush overgrowth, fallen branches, blackberry bushes and environmental hazards like old paint cans can be easily removed with a little effort and a pick up truck. The idea is to eliminate eyesores and anything that presents an unkept image.

Buyers for grandpa’s land are going to want to walk on it and visualize what they want to do going forward. They will want to do that without stumbling upon a rusted out 55 gallon drum or an old washing machine. For walking the property, a landowner can easily cut in a footpath leading into a prospective homesite and even clear out the suggested building site for minimal dollar outlay. Check out permitting requirements first.

Survey / property lines:

Is there a survey? If not, consider getting one. Beyond that, we get to one of my pet peeves that I see even experienced land developers doing all the time. That is failing to stake property corners and brush cutting lot lines. If there is a survey, there will be rebar - somewhere! Finding rebar can be a real puzzle, but once it is found, stake the corners and mark them with orange or pink flagging tape.

Run a line from corner to corner and brush cut the lines. Along the way, flag them too. If you can’t find the corners of a surveyed lot you can hire a surveyor to locate them for you for minimal cost. Once the lines are cleaned up and marked, you can also get a good idea if there are any encroachments from neighboring properties that could result in an adverse possession claim.

For more, see this article on adverse possession: https://www.landdevelopmentrealities.com/home/2019/1/8/adverse-possession .

It’s weird but flagging tape sends a subtle, but unmistakable message: Something has been done to or is in process for the property. It’s almost a universal signal and also freshens up the look for any prospective buyer. It also makes the true boundaries of the property understandable to anyone. This is a cheap and effective way to make it better for all involved - yourself, prospective buyers, neighbors and real estate agents.

Drainage:

Some land owners install drainage for a lot they are selling. In my opinion this can be a great idea or a terrible one. The reason why is that drainage requirements are closely tied to whatever the final improvements will be for the lot, along with where the improvements will be placed. Before spending any real money on drainage issues for small pieces, I would be certain that the drainage improvements are directly related to what the final improvements will be! In our scenario regarding grandpa’s lot, you probably just don’t know!

A caution:

Some guys are the type to rent a machine and start dirt work. If that’s you, be smart and know what permits are required and what areas you can or can’t touch. There is more than one landowner that scraped a lot clear only to find he unintentionally filled in a wetland, encroached on a neighbor, or generally messed something up.

Review:

There is one other strategy that is not a physical improvement, but an economic one. It’s called market value appreciation over time. In other words, hold on to the land and let its value increase. Grandpa’s lot is probably worth a heck of a lot more today than he paid for it back in 1969, and he never did a thing with it. If you are financially comfortable and not pressed for time, you could just sit on it for a while.

All of the ideas presented are simple and could enhance the value of land with proper thought and execution. Although simple in nature, some cost more than others. If I could pick one thing that is both simple and economical it would be to have a fully surveyed lot, staked at the corners and clearly marked with flagging tape. The lines are brush cut and marked so the boundaries are easy to see and understand. Remember, raw land can be hard to visualize, so why not make it easier for all? Good luck!