Value and exit strategy
Use comparable land with similar usable area, access, utilities, approvals, and buyer demand. Price per acre can mislead when one tract is developable and another has major constraints. Evaluate the end buyer’s costs, not only yours.
Budget taxes, insurance as appropriate, maintenance, financing, surveys, engineering, approvals, marketing, and time. Land may produce no income while you wait. Confirm that your capital can remain tied up for a slower-than-expected sale.
Choose an exit supported by current evidence. Selling to a builder, subdividing, or holding for future demand requires different work. Do not assume a future zoning change or infrastructure improvement unless it is verified—and even then consider execution risk.
A serviced buildable lot sells for $60,000. An unserviced parcel needing $25,000 of work and $5,000 of approvals is not worth $60,000 simply because it has similar area.
Decision checklist
- Compare serviced and usable characteristics.
- Budget holding time and every necessary approval or site cost.
- Identify a plausible end buyer and a delayed-sale case.
Check your understanding
Why compare land by usable characteristics rather than acreage alone?
Show the answer
Access, servicing, approvals, constraints, and demand change what an end buyer can actually do with it.
Your next action
Write a base and delayed-sale budget. Identify the buyer and the evidence supporting resale value.
Original teaching framework and hypothetical example. Source directory and editorial approach →