how do you appraise land ?
are you the appraiser? the land owner?
You can have land appraised a few different ways. They can appraise it ‘as-is’. They can appraise it in a ‘best use’ scenario, which obviously means if the land was used in the best possible way what that land would be worth. They can also appraise it as what it will be worth when the land is developed as in the form of a parking lot. There’s more I’m sure that’s just what I am fimiliar with.
On an “As Is” value with highest & best use being improved with 1-4 unit residential property, we just look at comparable sales. I don’t know commercial. :biggrin
Commercial land isn’t really different. You compare sales on a per acre or per S.F. basis. Sometimes per front foot. Depends on the market and the tract of land. In areas with mostly ground leases, you would capitalize the NOI and convert to a unit value (price per acre, etc…). If your subject tract is completely level and a sale has a rolling topo, you would want to make an adjustment for that. Consider the tract’s visibility, access, topography, any adverse easements or encumberments, exposure, utilities, etc…, compared to the comparable sales. Remember that 1 acre = 43,560 S.F.
thanks everyone for your inputs
additionally, how do you value commercial land after construction work ? for instance, land purchase was 1.1 mil and construction is 500k. How do you value land’s worth after construction completed?