Investing in land can be a lucrative decision, but it can also be a risky one. Before purchasing any piece of land, it’s best to assess its value accurately. While some factors are obvious, such as location and size, there are other aspects to consider when determining if a piece of land is truly a good investment. 

In this article, we’ll explore the various factors that contribute to the value of land for sale and offer guidance on how to assess whether a particular piece of land is worth investing in.

Factors that contribute to the value of land

The value of land is determined by various factors, including the following:

• Location – Properties located in desirable areas (land included), such as waterfront or downtown locations, tend to have higher value.
• Size –  Naturally, larger pieces of land are more valuable, although they can also be more expensive to maintain.
• Zoning – Zoning laws determine how the land can be used, and properties zoned for commercial use tend to be more valuable than those zoned for residential use. 
• Accessibility – Properties located near highways or public transportation generally have higher values.
• Natural resources  – Natural resources, such as water, oil or minerals can significantly impact the value of land. Properties with these resources are often more valuable.

Should you buy a piece of land as an investment?

Buying a piece of land can be a wise investment, especially if you’re willing to take a long-term approach. That’s because land holds tremendous potential for the future. But since you’re dealing with something of value, approach the purchase with careful consideration and planning.

When buying land, you’d benefit greatly if you work with a real estate agent who can help you find the right property and have your finances in order. You should also consider the value of homes in the neighbourhood, utilities, road access and any incentives that may be available. However, keep in mind that it’s unlikely to get a loan for vacant land.

After finding the right piece of land, you’ll need to sign a land contract that includes everything you and the seller agree to regarding the purchase. You’ll also need to review state-based real estate forms, a closing statement that highlights all of the costs that stem from the sale and a deed that transfers the land’s title from the owner to you.

Who can help you assess the value of a piece of land?

While a real estate agent can help with buying and selling homes, they may not be the best resource for land purchases specifically (although some may specialise in land sales and have knowledge of local land values and regulations).

One option is to work with a land appraiser, who can help determine the market value of the land based on factors, such as location, zoning regulations and potential uses for the property. You may also partner with a land surveyor, who can provide information on the physical boundaries of the land and any potential issues like easements or encroachments. 

Are you thinking of buying a piece of land anywhere in Australia? What locations are you considering?