Evaluating development land involves much more than looking at acreage and asking price. A property may look attractive on a map but still have limitations involving utilities, access, topography, zoning, floodplain, wetlands, infrastructure, or development regulations.
When I evaluate development land in South Carolina or North Carolina, I am looking at how all of those factors work together and whether the property can realistically support its intended use.
What makes land suitable for development
Good development land needs more than just usable acreage. Utilities should be within reasonable reach, the terrain needs to work for the intended project, and the property must fit within local zoning, UDO requirements, or applicable development guidelines.
The property also needs to have enough usable yield to support the proposed development. A 100-acre tract does not necessarily mean 100 acres can be developed. Roads, buffers, drainage, wetlands, floodplain, steep terrain and other restrictions can significantly reduce the amount of usable land.
Access and road frontage
Adequate road frontage is usually important, but lack of frontage does not always eliminate a development opportunity.
Sometimes additional access can be created, a new road can be constructed into deeper acreage, or an adjoining parcel can be acquired to provide better access. What matters is whether the property can ultimately achieve the access and frontage necessary for the proposed use.
Access also needs to be evaluated from a practical standpoint. Road classification, sight distance, turning movements, driveway approvals and future traffic demands can all affect whether a property works for development.
Utilities and sewer availability
Utilities are critical when evaluating development land.
Public sewer is often necessary for larger residential projects and is usually extremely important for commercial, industrial and higher-density development. Sewer may not always be required for low-density residential development, but the availability and capacity of nearby infrastructure can dramatically affect what a property is worth and what can be built.
Water is important as well. In some rural subdivisions, individual wells may still be practical, but larger projects frequently require public water.
Electricity is almost always needed, and the size and capacity of nearby water and sewer lines matter just as much as their location. A utility line may appear to be close to a property but still lack sufficient capacity to serve the proposed development.
Extending or upgrading utilities can become expensive very quickly, so this is something that should be investigated early.
Topography and usable acreage
Topography is one of the most important factors in determining whether land can be developed efficiently.
You need to understand how water moves across the property, where the high and low areas are, and how much grading may be required. Excessively steep terrain can make roads, utilities and building pads much more expensive and, in some cases, can make portions of a property impractical to develop.
Drainage patterns are especially important during major storm events. A property can look perfectly usable on a dry day and reveal significant problems after heavy rainfall.
The number that ultimately matters is not simply gross acreage. It is usable acreage.
Floodplain and wetlands
Whenever possible, development should be planned around floodplain and wetlands rather than assuming those areas can simply be altered.
Wetland delineations are sometimes required, particularly when development is proposed near streams, drainage areas or suspected wetlands.
Building within a designated floodplain may require flood insurance, additional engineering or elevation requirements, and in some situations financing or insurance may become difficult or prohibitively expensive.
This becomes especially important in coastal areas of South Carolina and North Carolina, where flood zones, wetlands and stormwater requirements can significantly affect how much of a property is actually usable.
Floodplain and wetlands do not automatically make a property undesirable, but they must be understood before determining development potential or value.
Zoning and future land use
Zoning determines what a property can currently be used for, but it is not the only thing I look at.
Municipalities and counties often maintain comprehensive plans and future land-use maps that show how an area is expected to develop over time. A property currently zoned residential, for example, may sit within an area identified for future commercial, industrial or higher-density development.
That does not guarantee that rezoning will be approved, but it can be an important indicator when evaluating long-term potential.
I also look at surrounding properties, nearby development activity, utility expansion, road improvements and other changes that may influence where an area is headed.
Highest and best use
Highest and best use is the process of determining the most financially productive and realistic use of a property.
That use does not always match the owner’s original plan, the property’s current zoning, or what has historically existed on the land.
For example, a property that has been used as a farm for generations may now sit directly in the path of residential or industrial growth. In that situation, its value may be tied much more closely to future development potential than its agricultural use.
Understanding highest and best use is critical when determining value because development and transitional land should be evaluated based on what the market can realistically do with it.
Assemblages and neighboring properties
Sometimes the most valuable opportunity involves more than one property.
Combining adjoining parcels can create better road frontage, additional access, utility connections, improved development yield or simply enough acreage to attract a larger developer.
In transitional land areas, we frequently speak with multiple adjoining property owners to determine whether an assemblage makes sense.
When handled correctly, an assemblage can sometimes create significantly more value for several owners than each property would have produced if sold individually.
Due diligence before buying
Due diligence is where many of the most important questions are answered.
Depending on the property and proposed use, that may include questions such as:
- Are the soils suitable?
- Can the property obtain public water or sewer?
- Is sufficient utility capacity available?
- Are wetlands present?
- How much land lies within the floodplain?
- Can permits be obtained?
- What grading will be required?
- Is rezoning necessary?
- How many residential lots or commercial sites can realistically be created?
- Are there access or road-improvement requirements?
Due diligence is especially important because buyers should have an opportunity to investigate these issues before becoming fully committed to a property.
A development tract should not be evaluated simply on what it looks like today. The real question is whether the property can support what the buyer intends to build tomorrow.
Why local land experience matters
Local land experience matters because every market has its own challenges.
An experienced land broker understands the local soil conditions, development regulations, zoning processes, setback requirements, utility providers, municipalities and common obstacles that may affect a property.
Just as importantly, experience creates relationships with the engineers, surveyors, attorneys, developers, utility representatives, planning officials and other professionals involved in land transactions.
I often compare local land expertise to a good local diner compared with a national fast-food restaurant. At the local diner, the people know the area, they know their customers and they often know what those customers need before they even ask.
Land is similar.
The more familiar you are with the area, the people and the development process, the faster you can recognize both opportunities and potential problems.
That local knowledge can be especially valuable when evaluating development land throughout South Carolina and North Carolina.
About Abe Mills, ALC
Abe Mills, ALC, is a land broker serving South Carolina and North Carolina, specializing in development land, transitional land, commercial and industrial land, farms, acreage and complex land transactions. He is an Accredited Land Consultant and serves as National Vice President of the REALTORS® Land Institute.
Considering a land purchase or sale in the Carolinas?
If you’re evaluating development land in South Carolina or North Carolina and want help understanding access, utilities, zoning, development potential, or highest and best use, contact Abe Mills, ALC.