8 Steps to Determine Land Value: A Comprehensive Guide

Learn how to determine land value in this comprehensive guide. Research the market, consider location and size, examine views, and more.

8 Steps to Determine Land Value: A Comprehensive Guide

Determining the value of land is an important aspect of real estate investment. Land value is the price that a buyer is willing to pay for a piece of land and it is determined by several factors such as location, size, accessibility to public services, views, zoning restrictions, and availability of utilities. In this comprehensive guide, we will explore the steps involved in determining land value.

Step 1: Research Land Values in Your Area

The first step in determining land value is to research the market. You can use online resources to find out what similar properties are selling for in your area. You can also speak with a local real estate agent and ask them for their advice on how much land would be worth if it were sold today. If you're looking for more specific information about what the government thinks about land values in your area, contact your local government office or visit their website to see if they have any data available on this topic.

Step 2: Consider the Location and Size of the Property

The location and size of the property are important factors that determine land value. You should consider how easily people can get to the land, whether it is near public transportation, and if there are any major roadways nearby that would allow for easy access. You should also consider the dimensions of the property and if they meet city standards for building permits. Smaller parcels of land are typically more expensive than larger ones.

Step 3: Examine the Views

Views are also an important factor in determining land value. You should examine the views from the property and check for potential obstructions such as trees or buildings that may block your view of an otherwise beautiful landscape. You should also consider whether there's any possibility that the view could be obstructed in the future by development on adjoining properties.

Step 4: Determine the Availability of Utilities

The availability of utilities is another important factor in determining land value. You should determine if the land is suitable for development and whether or not it has been zoned properly. Water and sewer lines are required by law in most areas and can be easily located by looking at an aerial map or contacting your local government office. Electricity may also be available on site; however, if it isn't then there will need to be an electric line installed before building can begin.

Step 5: Understand Zoning Restrictions

Zoning laws determine what types of buildings are allowed, how big they can be, and where they can be placed on a lot. They also specify other restrictions such as minimum setbacks from property lines or maximum heights. If you plan to build something that doesn't comply with local zoning laws, you may need to apply for a variance or change them through an amendment process.

Step 6: Calculate the Value of the Land

Now that you have a good idea of the land's value, it's time to calculate the actual price. You can compare the land to similar properties in your area to determine its value. You can also consider the potential for future development on the property. Calculate what someone would pay for both land and building separately--then add them together.

Step 7: Consider Other Factors

Taxes, insurance costs, and maintenance expenses associated with owning the property are other factors to consider. If these expenses add up to more than what the land would be worth on its own, then buying it may not be worth it.

Step 8: Negotiate the Price

Once you have determined the value of the land, it's time to negotiate a price. You should research comparable sales in your area and make an offer based on those prices. If the seller rejects your offer, keep negotiating until both parties are happy with their respective positions.


Determining land value is a complex process that requires considering several factors. These include location, size, accessibility to public services, views, zoning restrictions, availability of utilities, taxes, insurance costs, and maintenance expenses. By following the steps outlined in this guide, you can determine the value of land and make informed investment decisions.

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