The Definition of Improved Land in Real Estate
Several Factors Can Cause Land to Improve in Real Estate Terms
A building is considered to be an improvement to land, but the term "improved land" in real estate has a broader scope. It includes any number of upgrades that make the land more usable. It can be something comparatively minor, such as that certain utilities and services have been made available to the parcel, to landscaping or the construction of structures or roadways.
Effect on Assessments
The nature of the improvements made to land can have a significant effect on property tax assessments. The potential for utility hookups would have at least some effect, but erecting a home or warehouse on the property would result in a marked increase in assessed value.
Improvements made to any structure located on the land would also increase value and, correspondingly, property taxes.
General Concepts of Land Development
Land development is the process of converting unused—or differently used—land into construction-ready sites for commercial, residential, or industrial building processes. Land development incorporates a number of secondary design concerns such as drainage, excavation, paving, and zoning/land use that must be addressed as part of the development process.
3 Types of Property
The majority of real estate agents and brokers work with one of three property types: vacant land, residential properties, or commercial properties. These types of property account for most real estate transfers.
You might want to narrow your focus as a new agent or broker to one or these property types. A study of the number of properties of each type in your area, along with their relative values, should indicate the possible financial rewards of working with them.
Top 5 Land Transaction Types
The top five types of raw land transactions are similar yet different. Ideally, some land will always stay in its raw state because there are many beautiful areas on this planet. But there are many great ways to develop land and make it useful for humans and our economy.
Land brokerage types include farms and ranches, undeveloped land, land that's still in the early stages of development, subdivisions and lots, and assembling parcels.
Control of Land Use With Zoning
There are three basic elements involved in the control of land use:
- The plan: Municipalities develop master plans for the use of their land, traffic, commercial and residential areas, as well as community schools and parks.
- Zoning codes: Zoning codes, laws, or ordinances are developed to specify what land uses and building types will be allowed in certain areas.
- Zoning permits: Zoning permits enforce zoning ordinances. Permits must generally be granted for all uses and structures.
A county or municipality must first determine the accepted uses for vacant land in developing a plan for growth, as well as proportions for each use and rules for the implementation of the plan. Depending on the area, this might include using land for residential, commercial, or industrial purposes, or it might include parks and green belts, community facilities, or flood control.
Zoning codes, laws, or ordinances control many facets of land use, including what can be built upon it and how the structures can be used. They include:
- Size of lots for subdivision
- Types of structures, as in residential or commercial
- Use of the land for agriculture, industrial, or other purposes
- External appearance or style of structures
- Density, or how many structures/units can be erected in a given area
- Setbacks, or how far apart structures must be
Communities use zoning hearing boards to enforce, manage, and modify zoning ordinances. These boards grant zoning permits and perform other duties pertaining to zoning. They hear citizen complaints and suggestions concerning zoning ordinances.
Land is a finite commodity, and it will always appreciate in value. As the population increases, cities will spread out and more land will be incorporated, zoned, and developed.