this is a question for every land investors.
how much does the land value increase per year?
the appreciation will increase for sure?
is it possible that the value decrease?
what is the best advice for the land investor?
Buy cheap in a spot thats about to get hot… and don’t kill the golden goose.
Rate of appreciation is very market-specific. The value of land depends on how it can be used by potential buyers. So the value rises if its use is in greater demand, location is in demand, has access to public utilities that will enable maximum development (higher yield). Conversely, value will fall if, e.g., ordinances have changed requiring larger min. lot size or coverages, moratoria on development, or deed restrictions/covenants limiting development. Value is relative to use.
Nancy
When a home goes up, it is the land that is the driving force.
There is no set appreciation value and as was mentioned, it depends on a whole set of conditions.
You should not be buying land at retail prices anyway.
Value is in the eye of the beholder. It can go up or down depending on what is around it. Try to avoid buying land in hyped areas. For example, buying in an area because there is a proposed development going up that will raise prices high. Everyone is interested so prices go up immediately. You buy at the inflated price, the development never happens, land returns to its “real” price, and you lose money.
Think about this. You own a decent parcel for residential use. The 3 surrounding parcels (1 each side and 1 in back) decide to put up MH (mobile homes). The value of your land takes a hit because you lose potential buyers who are interested in building a home. It is important to know the restrictions of the land.
My advice would be to read up on land ownership including zoning, restrictions, easements, et al.
Land value appreciation is based upon algebraic logorythms that are divided by eternity.
But seriously, your land values are based on demand in your area. We have all seen the values of property in VA, FL and CA. Other areas are more stagnant. I hate to use the old axiom, but I will, it is about location, location, location.