Recommended Improvements???
Hello All,
I am in the process of subdividing 25 acres into 5-6 lots ranging from 4-6 acres each. These lots are rural wooded lots with about 200 ft of road frontage per lot. There are nice mountain views across from the lots. Surrounding homes are sparse but are generally old farm houses and mobile homes.
I intend to market the lots to the end-users with restrictions. The price of the lots will be 25-35K each.
What improvements do you feel are necessary to make the lots more marketable? I was thinking of installing the driveways and clearing the house site so the buyer could appreciate the view. In other words, try to paint the picture for them. However, this will be costly, and I don't have a lot of available cash at this point after surveying and soil scientist costs. I would appreciate anyone's experiences with this type of deal and any recommendations as to how to make the lots most appealing with the least amount of money. Thanks in advance.
Brad
Wooded lots are tough to sell to end users. The municipality may have tree or landscape ordinances restricting what can be removed and where on the site, so I would check that before doing anything and also have that information available to answer buyer questions.
Once the subdivision is complete, have your engineer/surveyor put some additional markers (with ribbons) along lot boundaries and stake out the building envelope. I would not install driveways because you don't know: the buyers' house designs, what they would do with the lots (build or not), and how the houses would be sited on the lots. What restrictions did you have in mind for the lots?[ Edited by NancyChadwick on Date 05/08/2004 ]
Nancy,
Thank you for your response. The most important restriction I felt necessary is to disallow mobile homes.
Are there any restrictions you would recommend that would make the lots more desirable?
Could you explain how a builder goes about pricing a lot for a spec. house? Let's say the finished home will sell for 150K.
If you are only getting 5-6 lots out of a 25 acre tract I am going to assume a couple of things:
1) you are in a fairly rural area that does not have a lot of zoning restrictions or enforcement of building codes??
2) public water and sewer are not readily available for the property.
3) You make no mention of the installation of any streets or major infrastructure. I assume that is b/c the property has a lot of road frontage and so you can subdivide without installing a new street??
If you have public sewer access than you ought to get a lot more lots on this property. SInce more than likely you do not have sewer I would go ahead and perform all soil tests required by the county to demonstrate that septic tanks could be approved for all lots. I would have the property corners staked and the lines flagged since the lots are large. Personally, for such large lots I would not stake the building setbacks in addition to the property lines as more than likely w/ a 5-6 tract the builder/owner will have plenty of room to set the house where they want.
In our area, builders usually will spend up to about 1/5 of the finished selling price of a home on the lot cost. This would be for a developed lot so if any infrastructure has to be placed the raw land will sell for less. If a house is going to sell for $180,000 finished, then the max a builder around here will pay for a lot is around $36,000. It is all really a numbers game and the desired profit margin of the builder.
Keep in mind the more restrictions you place upon the land the more specialized you are getting with your buyer. The less restrictions=larger market of buyers.
millionby30,
In my area, builders use 25%. So if the house on its lot would sell for $150K
$150K X 25% = $37K less cost of horizontal improvements to the lot
woodsong,
I didn't see that the lots are oversized. You're right about not staking out the setbacks, although it might be helpful for the surveyor to flag some key points if a lot has some particular physical feature that might impact the building envelope.
Woodsong:
Thanks for your reply. Your assumptions are correct. The lots are in a rural area and will require private septic systems and wells. No roads will need to be constructed. The reason for the "large" lots is a combination of zoning, topography, and potential buyers.
In my opinion, a buyer looking to buy a lot in this area would not be satisfied with a 1/2 acre lot. They could find that closer to town. I'm trying to sell a "secluded, wooded lot in an undisturbed location", but at the same time market the lots by helping the buyer envision the finished product. One type of buyer I'm hoping to market to is the Washington DC retirees who are moving into the "country" for a simpler way of life. I'm trying to assess how I should improve the lots while getting a return on my money. What do you think about installing driveways and clearing homesites?
Nancy,
As always, thanks for your replies. I always look forward to the opinion of someone with your knowledge and experience. Any further thoughts are much appreciated.