Landowners should understand the value of their land and the factors that affect the price of land. This type of knowledge and insight will help you get better deals for your property. Whether you want to sell your land or lease it for its resources, understanding the value of land across the United States positions landowners to get the most value from their property.
Methods of Land Valuation
There are three primary methods of land valuation:
Sales comparison approach
The sales comparison approach is the most commonly used method and involves analyzing recent sales of similar properties in the area to determine the market value of the land.
This method is useful in areas where there are many comparable properties, but it may not be as effective in rural or undeveloped areas where there are fewer sales to compare.
The income approach is another method of land valuation that is primarily used for income-producing properties, such as rental properties or commercial buildings.
This approach involves analyzing the property's income potential and comparing it to other similar properties in the area. The income approach is useful for determining the value of land that generates revenue, but it may not be as accurate for undeveloped or non-income producing land.
The cost approach is the final method of land valuation, and it involves analyzing the cost of building a similar property on the land and subtracting the depreciation of the property.
This method is useful for determining the value of new or undeveloped land, as well as for properties where there is no recent sales data or income history to analyze. However, the cost approach can be more time-consuming and may not accurately reflect the true market value of the land.
State-Specific Considerations for the Value of Land
Certain areas in the US are more valuable for certain resources that are natural, agricultural, or renewable. LandGate’s property report is available for landowners to view their lands’ value for agricultural, renewable energy projects like solar and wind, and natural resources like oil and gas. As landowners who have mineral rights and choose lease mineral rights, there are certain areas across the United States that produce oil and gas. These areas are called 'basins,' and the U.S. Energy Information Administration provides the names of all the basins and states located in them. LandGate provides this information all on one map with more information such as leasehold and sale value, existing pipelines, and more. The property report will also provide specific information for your land’s value for oil and gas potential. But did you know that solar and wind farm potential can be viewed in a similar way to oil and gas basins? Apart from the renewable energy incentives for developing solar and wind farms, there are certain areas in the U.S. that perform better for solar and wind energy projects.
Landowners on the East and West coast of the country have better solar opportunities.
Landowners in the Midwest, Northeast, and Texas areas have better wind opportunities.
When you view LandGate’s property report, you will be able to see the estimated lease value for these renewable energy potentials. Other aspects will affect the land’s cost for certain projects as well. Buildable acreage is something that can affect the average price per acre for a solar or wind project. The amount of topography and wetlands will also affect the acreage of land usable for project development. Similarly, solar and wind developers also consider proximity to electrical infrastructure as they evaluate parcels of interest.
LandGate's property report will display the buildable acreage amount available for your parcel broken down into those categories. Find out which leasing opportunities exist for your land today!