How do I determine the value of a lot with a house that needs to be torn down.
It is in a prime location, but there aren't any empty lots to compare to.
Without comps it is very hard to determine value. Expand your search for comps. Look for lot sales in other areas that are similar to your location. Even look in other towns or counties.
Lot values are relative not only to supply and demand but also to what is the best and highest use for the lot. A good rule of thumb for residential lots is 20%-30% of the house value. Commercial lots are more relative to construction cost and cap rates. Waterfront property is more relative to supply and demand.
Ben , the question here is not more money........ because it's only worth what the houses around it are selling for. An addition sounds great, and would probably bring you some extra cash in the deal. The real question is what are the houses around your neighborhood doing? Do you have other "barn condo's"in the neightborhood? and if you do, are they comparable in size, and age? It's always good to spend alittle to make alot, but weigh all the pro's and con's here........ the issue is will you be able to sell it for your desired price after your work is completed? Only your comparable sales in the last 3-6 months can answer that! If you do have similar properties in the neighborhood , the next question is will you still be able to use them as a comparables when it comes time for you to sell when the work is done?
Without comps it is very hard to determine value. Expand your search for comps. Look for lot sales in other areas that are similar to your location. Even look in other towns or counties.
Lot values are relative not only to supply and demand but also to what is the best and highest use for the lot. A good rule of thumb for residential lots is 20%-30% of the house value. Commercial lots are more relative to construction cost and cap rates. Waterfront property is more relative to supply and demand.
I use 25% of the probable value of the new home on the lot and then back out any costs for site prep, permits, etc.
Is this in a historic district and do they have ordinances that dictate what changes can be made?
I live in a Victorian home and know the cost of doing it right can be expensive.
If you are emotional attached to such then you know your answer.
Also is this a long term investment or are you looking at getting out in 5 - 10 years?
The changes that you make.....how will it effect the sale of the house?
NC_Yank
PS. Welcome to TCI...........(side note; websites should be posted in your personal section.)
Ben , the question here is not more money........ because it's only worth what the houses around it are selling for. An addition sounds great, and would probably bring you some extra cash in the deal. The real question is what are the houses around your neighborhood doing? Do you have other "barn condo's"in the neightborhood? and if you do, are they comparable in size, and age? It's always good to spend alittle to make alot, but weigh all the pro's and con's here........ the issue is will you be able to sell it for your desired price after your work is completed? Only your comparable sales in the last 3-6 months can answer that! If you do have similar properties in the neighborhood , the next question is will you still be able to use them as a comparables when it comes time for you to sell when the work is done?