RAW LAND VS. DEVELOPED LAND

There are so many factors that come into play when you look at the value of land whether it is for construction of a single home site or residential development for multiple homes.  Sellers and buyers alike are not aware of the costs that can be associated with making a site build ready from a development standpoint. 

Let’s start by understanding what we mean by raw and developed land.  In simple terms, raw land is land that does not have water or sewer taps to connect to a home or even water and sewer lines to the site. If you look at land for a residential development, there are no water or sewer lines run through the property, no roads or storm drainage in place and it has not been platted.  Developed land has all of the engineering completed and all of the infrastructure in place. 

All of that addresses “city” property, but even when you talk about county land that may not have water and/or sewer available, engineering, platting, roads, and septic and well systems will be necessary to construct any homes.

The importance of all of this is one must understand the associated costs of developing property in addition to the cost of purchasing the raw land and the associated time to complete the preliminary work and construction of the infrastructure.

The chart below outlines some of the possible costs associated with development but each parcel can have additional costs not noted and would need to be analyzed individually.  There are several factors that will affect the individual lot cost of development on both city and county parcels of land.  We will look deeper into this next time.