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Not Just Price
Builders evaluate land by finding land that they think they can develop profitably. They focus their investigation on what they can build, how much they can build, how much they can sell, how long will it take and what the costs are. Sometimes, they can tell quickly, other times they have to pursue further.
Zoning governs the uses that are permitted on your property. You should consult the municipalities' subdivision and land development ordinances to find out to what extent you can subdivide your land to create two or more parcels. The ordinances that are amended periodically spell out construction and design standards for site improvements such as curbs, sidewalks and streets, safety issues, as well as other issues like street lighting, grading and landscaping. They may also include procedural requirements dealing with submission deadlines, size or paper and types of data to be shown on the plans.
Many factors determine what a parcel of land is worth, including location, uses allowed by zoning, number of lots and the costs of development. The value of residentially developed land is calculated on a per lot basis and not per acre because, for instance, a 10 acre property can produce 5, 6, or 8 lots, but it won't produce 10 lots because some of the land will be wasted. Therefore, the value of the land depends on what the parcel will yield.
Location is important because it's the only thing about the property that you can't change. Well, you could move the house, but that would be expensive. It's the land that gives the property its location, not the house. The house isn't permanent. Only the land is permanent. You are pretty much stuck with the location. Location determines current zoning, types and values of properties in the vicinity and the presence of public utilities. These things are a major concern for success or failure if you are going to develop land. Your ability to develop a property hinges on several other factors such as land features and constraints. Man made conditions such as regarding, creating a pond, or contaminating soils and groundwater. Natural features consist of everything that is not man made including topography, parcel size, shape, wetlands, rock and floodplain. Natural and man made conditions are sometimes called features and constraints because they have an impact on the ability to develop property.
Price should be the last thing that you think of if your going to buy land and develop property, because price is relative to just about everything else relating to the property. This includes the suitability of the property for development, but the types of contingencies included in the purchase contract, such as a period of time to investigate the property and collect information. The wording of terms and conditions can make or break the deal and consequently, terms are often more important in the land transaction than price itself.
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