Danny Smith, broker associate and co-owner of Smith & Smith Realty, is an accredited land consultant (ALC) and a certified commercial investment member (CCIM). The education and knowledge he gained through these certifications qualify Danny to answer the following question, one he hears all the time on and off the job:
Q: What’s my property worth?
A: Smith & Smith Realty offers a broker opinion of value, which is not an appraisal, but we do comprehensive studies to put together a report and we do that for free in most cases. This question is not something that can be answered by saying, for example, the land is 40 acres so it’s a $200,000 property. It’s not that simple, even on vacant land. Commercial property is sometimes even more complicated. It’s a matter of sitting down with science and a little bit of gut feeling, too, and knowing the market and coming up with a value.
With residential, you can compare houses. If you have three houses of the same size, the same year, and they sold for these amounts, the average is the value, and that’s it. With commercial, if you find enough similar properties, you basically can do the same thing, or you can look at the income stream or dollar per square foot.
However, land is something unique. Even though two properties can be in the same area, one side of the road might bring more money than the other side of the road. One piece of property may adjoin another piece of property that makes it more valuable. You’ve got to look at why somebody bought a property. Many times, a neighbor will pay more than anybody else for a property because they want the property next to them.
Smith & Smith Realty looks at sales of similar properties, property conditions, water and sewer, environmental factors. The use of the property makes a big difference. We look to see if we can transition the property into a higher and better use, in other words, can we take that cow pasture and turn it into a shopping center?
The biggest factor about land is location. You can do anything to land but move it. Just because you can do something on the land, does it make sense to put it there? To try to turn a cow pasture into a shopping center when you don’t have any rooftops around, it’s not going to work. Retail follows rooftops. Restaurants follow rooftops. For example, view the images below that indicates a commercial property development plan in process.
Those are the factors you need to consider when determining the value of your land, and Smith & Smith Realty can help you make that determination.
1102 N. Main St., Suite F, Wildwood 34785