Knowing the land value of a property can help you compare properties for sale in an area. It is a useful tool to get a picture of the value of a property you are considering and to judge if you are paying too much.
It is not the only tool you would use to gauge if the property is good value but one that helps a build a good picture to help you make an informed decision.
To calculate the value of the property by land size:
If a property sells for $500,000 and has a land size of 600m2- to calculate 500,000 ÷ 600 = 833.33, therefore the land value is about $833 per square metre
To compare if that is good value for the area you are looking at, it is very important to find similar properties when calculating their land value for comparison, as different types of properties hold and grow their value differently- for instance you wouldn’t calculate the land value on a townhouse then on a stand alone house to compare them.
So if you’re considering a weatherboard house on 600m2 then calculate similar weatherboard houses that have sold in close proximity, preferably in the last 6 months.
This is not an exact science as there are always anomalies as to why a particular house may have sold for a particular price, so use this as just one of your tools to build your picture on a particular property.
If you’d like to know more about buying property like a professional, why not book in for a FREE 30 min House Nous call with one of our Property Coaches? Book your time slot today-> https://bit.ly/3lrSGf9