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The exact price of the particular piece of property including all the resources available within the boundary of this property refers to the Land value meaning. It also includes all the improvements and renovations made to this land. It is important to note that land value and site value are two different concepts. The latter can be defined as the value of the land only. It is assumed that the site is not associated with mortgages, resources, Taxes, and leases.
Two major factors that can increase the price or value of the particular land are:
If the land contains oil, gas, and other natural resources, then its value will be higher than other pieces of property. Simply put, the more resources the land contains, the higher its value will be. The owner of the land determines the exact Market price of the property by determining the land value. For instance, someone who provides the land for rent to the ranchers and farmers can charge the price based on the current market prices and land value in the area.
The property owner can use the property appraiser’s suggestions to determine the land value. Now, a land appraisal can be defined as the process that involves the comparison of the given piece of land with other Real Estate properties. Note that land comparison must not be confused with the comparative market analysis in which the appraiser considers the value and market of the real estate properties that have been sold recently.
It is extremely important for the land seller and buyer to hire a professional appraiser, so that it gets easier to determine the exact value of the land-based on the crucial factors. The appraiser checks the defects of the properties too. The place where the property is located can have a great impact on its value. For instance, the land located in remote locations might not have a significant value since they do not offer you access to transportation, basic amenities, and other utilities.
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In other words, if the land is not associated with useful resources, then its price might not be as high as the other piece of property of the same size and length. Similarly, the value of the property is high if its location is somewhere near the city, hotel, entertainment venue, and other such areas.
Other factors that could influence the value of the land are environmental issues. The land tends to lose value if it is located in an area that is prone to natural disasters, such as floods, earthquakes, and more. The buyers are not interested in Investing in real estate properties that are prone to environmental damages. The risk of experiencing a natural calamity while residing in such properties outweighs all the perks of the property.