How to determine the Price of Land in Kenya
The three most significant influences on the cost of land and value are utility, scarcity, and desirability. The value of land tends to increase each year at a higher rate than inflation. Land pricing and value are generally determined by an assessor who is a specialist in calculating land market values. To determine land price and value yourself, you need to conduct some due diligence at your local county.
We at DENKO Properties always believe it’s far better to buy at a discount and sell the property for an average price, rather than purchasing at an average price and hoping to sell at an exceptional one. You have to know what to pay for the property, and that does not mean paying what the owner or agent is asking for.
Here are some of the methods you can use to determine the price of property:-
• Take location into account.
The location of the parcel of land you are considering will determine how it is assessed. If you are looking at a small city lot, it is valued by site or square foot, which is the most common assessment of parcels under 2.5 acres; parcels larger than 2.5 acres are assessed by the acre.
• Compare the physical attributes and amenities of the piece of land.
You should consider comparing the land to other properties of the same value around by physically visiting each and checking the following factors that contribute or detract the land cost and value:
- Quality of location.
- Fertility and climate.
- Convenience to shopping, schools, and parks.
- Availability of water, sewer, utilities and public transportation; absence of smells and noise.
- Patterns of land use; frontage; depth and topography.
- Streets and lot size.
- Zoning and taxation.
- Building and planning restrictions.
- Views; wetlands; and accessibility.
• Research recent comparable sales in the area for land.
Rather than looking at the total selling price, look at the price per square foot or price per acre. This will help you to adjust the comparable sales to the exact size of your property. You will also need to adjust the comparable sales for the property’s value based on the unique characteristics that you have uncovered in your research.
• Meet with your local government entity’s planning or zoning commission.
These are the people who can give you a sense of what your property’s zoning will allow as well as precisely what they would like to see on the parcel. They can also let you know what kind of setback requirements your plot has, as well as any other limitations that may impact how much of the land is usable for building.
• Where necessary, locate and visit the tax assessor’s office within the county government’s building.
The assessor’s office keeps files on every property in the county, including the sale price, as a part of public record.
• Conduct your current market analysis
It is important to do your own market analysis (otherwise done for a fee by a real estate agent) from the property files on record at the assessor’s office by extracting and comparing selling prices and other pertinent information on comparable properties that have been sold in the last 12 months. These properties should be close and similar in size, age and condition as the property you are interested in.