This article is a short overview of land, how it’s measured and used, what attributes affect the value of land and a discussion of highest and best use considerations.

LAND MEASUREMENTS

Land is generally measured in acres. One acre is 160 square rods or 43,560 square feet and there are 640 acres in a square mile. A rod is 5.5 yard or 16.5 ft in length. Traditionally, surveyors would measure land by placing rods or chains end to end along a boundary. This method of measurement led to inaccurate readings on steep topography. A hectare is a metric measurement of land is 2.471 acres.

Land parcels in North Carolina and the original 13 colonies historically use a system called metes and bounds for their legal descriptions. This is the least accurate method of describing real estate and is discussed more in my article about boundaries.

In our state (NC), you’ll see in the chart below that most land is in the forests, followed by croplands, urban, and special use (which includes military bases and national parks).

LAND VALUE

Land values are affected by 4 factors:

1. Scarcity – The amount of usable land is finite and some types of land (such as flat building sites in the mountains) are scarcer than others. This is similar to supply.
2. Utility – This is the ability for the land to be used in some way. The more ways it can be used, the more value it generally has.
3. Demand – Factors in how many people want land.
4. Purchasing Power – This is the ability to buy. Since buyers of large parcels are often limited in financing options, this also affects the price they are able to pay.

When determining the highest and best use of a particular parcel, a real-estate professional will evaluate a property and try to take advantage of these factors in a way to increase demand and potential sale price for the seller. If a particular property could be developed into a residential subdivision, it may have a higher value than a parcel that is only suitable for timber production. Some characteristics that are evaluated in the process of defining the highest and best use for a parcel are physical characteristics, legal restrictions, and financial feasibility.

Physical Characteristics

• Accessibility
• Location
• Size and Shape
• Topography
• Water Availability
• Environmental Concerns
• Access to Utilities
• Soil Types
• Neighboring Properties

Legal Restrictions

• Zoning
• Deed Restrictions
• Ordinances
• Building Codes
• Easements
• Air, Surface, and Subsurface Rights

Financial Feasibility

• Potential Return on Investment
• Is Financing Available?
• Can Additional Value be Created?

By focusing marketing efforts in ways that highlight the land’s best attributes for the most likely Buyers, Sellers can increase demand and sale price on a given parcel.

I help my clients understand land acquisition, sales, and a parcels highest potential value and best use by providing them with education and knowledge to make informed decisions. If you’re looking for a professional land broker or need help understanding land issues like this, let me know! Pat Snyder, psnyder@nationalland.com, www.nationalland.com.