When hoping to sell, landowners should take every option available to them into consideration. One option for land use is multifamily development. The demand for multifamily (apartments or condos) raw land increases near metropolitan areas with stable economies and higher-paying jobs.
In once-rural counties adjacent to larger cities, infrastructure planning, suburban sprawl, and population growth lead many landowners to wonder, “What is the real value of my land?” A quick glimpse of a weekly local business journal will show that apartment land deals frequently occur both inside and outside of the urban core of major cities. Many people who hold on to their acreage for decades hope that the test of time will prove their investment was a good one when a developer wants to buy their parcels and build apartments. But are they really ready to sell?
Apartment communities offer an alternative to the dream of home ownership. Signing a lease on an apartment is frequently a viable option, especially if one does not have enough for a down payment on a house. There is also the added convenience of locale, not to mention building and lawn maintenance are typically included in most rental agreements. Housing prices have steadily increased and the supply of available single-family homes has decreased, especially in areas of the United States where post-pandemic migration has occurred the most, leaving many to decide to lease an apartment.
How a Land Broker Can Help
Landowners who believe their land has multifamily development potential quickly learn that the land should be high and dry (free of wetlands), maintain road frontage, provide clear and easy access, and be free from zoning restrictions that limit the density of housing units built on the land. A seasoned developer could work with the local county to change the zoning, known as “Up Zoning,” prior to closing the land sale, but if a tract is prepared with proper entitlements there’s a higher chance of receiving multiple and even competing offers for the land.
Paying attention to the development trends in the community, reviewing community zoning and planning maps, and making sure the land parcel(s) is free from any potential environmental/contamination risks from previous use are all important measures to take. Any major apartment development project requires access to water, sewer, and electrical tie-ins. If the utility tie-ins are far away from the tract, a developer might pass on pursuing the acquisition.
A land broker brings value in representing a land owner by relaying the highest and best use of the land as it relates to its sale and future development. A broker can provide comparable recently sold properties and help sort through the purchase offers if/when they come in, despite whether the tract is being sold off-market or is publicly listed. A broker can communicate on your behalf to the other party in a transaction, helping to smooth the dialog during the due diligence period and helping to remove any contingencies or conflicts that may arise.
If you believe your land might be a great fit for a multifamily development, a broker can assist with an opinion of value and prepare a marketing plan. As a seller, when negotiations begin it helps to have someone in your corner as your advocate. Trust, honesty, confidentiality, and accuracy matter. No doubt, multifamily developers will continue to need sites for building projects. With a broker, you will be much more confident about selling your land and just might walk away from the closing table with significantly more money in your pocket than if you attempted to sell on your own.