When assessing the land it is of the utmost importance to keep in mind that although there are numerous internet tools which you can use to value your property, it is always better to ask for an expert’s opinion because knowing the situation on the market and the delicacy of the assessment process is part of their job. However, it is good to be familiar with some basic principles of estimating the land value which both you and the assessor have to understand and use.
First, according to the principle of substitution an individual will pay for the land the same amount of money he would have to pay for an equally desirable substitute property. This approach assumes that the buyer will collect data, make adjustments, compare the prices and buy the property that meets his needs at the lowest price.
According to the principle of supply and demand the value of property will be higher if the demand increases. Since the supply of the land is unchangeable, when the demand goes up, the prices go up as well.
The principle of anticipation holds that the present value of the property depends on the anticipated benefit the owner will have in future.
The principle of conformity states that the price of the land is likely to be higher if it is used in a way that is compatible with the use of surrounding properties.
Good assessor will take all these principles into consideration, together with other components such as gas, electricity, water, sewer and other public utilities. He will also evaluate the possibility of using rights like mineral, grazing, fishing, hunting and others.
Of course, there are other factors that contribute to the value of the land. Above all, physical attributes of the land – fertility, location and climate – are of crucial importance to buyers in search for land. Different types of buyers are looking for different qualities in property – whether or not the land can be subdivided, is it far enough or close enough to their home, will the property fit into their lifestyle and so on. The type and amount of taxation, planning, building laws and other restrictions will certainly influence the price, as well as economic and social factors.
To value your land properly, you have to take into account all of these factors and methods. You have to check the sales prices of similar properties, to calculate the price of your property by square meter, and make reasonable and appropriate adjustments based on factors that contribute to the value. Combine this price with the income the property could generate and you’ll get the idea of how much your land is worth.
However, this is all subjective. The real price of the land is the sum the buyers are willing to pay for it. So, do your homework, make a research, calculate and consult real estate agents to arrive at a final opinion of value. And hope for the best.