One of the most famous Mark Twain witticisms pertains to land ownership. And it is excellent advice for anyone who wants to invest in commercial real estate. Twain simply espoused that people should buy land whenever possible because no one is making more of it.
Commercial land is a highly finite commodity on Earth. Consider that less than 29% of the Earth is comprised of land. And it is folly to consider that all of the land available on Earth is fit for inhabitation.
Over 33% of the land on Earth is covered by inhospitable deserts. And only a minute portion of land on Earth is suitable to live on.
Only an even smaller portion of the available and inhabitable land on Earth is suitable for use in commercial business enterprises.
Look at these population density maps of the United States and Australia for added context. All of the dark areas you see on the map are uninhabited areas or areas inhabited by townlets or villages with 500 or fewer people.
These maps were comprised of space satellite images analyzing the light pollution created by population-dense city hubs, suburbs, and towns.
And this is not a science lesson. This is a good way to appreciate that commercial land is preciously finite. And you must never forget the golden lesson when it comes to real estate; it all boils down to location and your ability to leverage the location of commercial land to your financial benefit.
So, how valuable is one acre of land worth? It depends on where you live and the demand of the local business market. One acre in Wyoming is worth $1,558. However, one acre of land in New Jersey is worth over $196,000.
The commercial real estate sector in the United States is worth about $10 trillion.
Only 6% of the land in the United States is developed. In other words, only 6% of the land in the United States has paved roads, buildings, and infrastructure on it that allows people to live in homes, work in buildings, and interact in society.
And only a tiny portion of the developed land in that 6%, commercially viable land, is more valuable than the rest.
Land is always valuable and is constantly changing hands. It is your responsibility to calculate every acre of value relative to your commercial business needs.
Several metrics can be used to determine commercial land value, several of which we will now examine. And we will also discuss zoning laws and what you need to do before buying land after calculating a per-acre price that works for you.
Contact Millman Land to get land surveying, zoning report, and title services for your commercial land purchases and business aspirations.
What is an Acre?
Before we discuss the average financial value of an acre of land, let’s discuss the average acre and the square footage of space found within.
An acreage, or acre specifically, is the intermediate term used to describe a large parcel of land sold in real estate dealings.
There are 43,560 square feet within one acre. So, how to put 43,560 square feet into a context one can appreciate? If you want to buy and invest in commercial land, you should understand the dimensions of the land you want to invest in.
The average American football contains about 57,600 square feet. And the average city block has just under 70,000 square feet.
So, relatively speaking, if you have ever sat in an American football field, you have seen the size of acreage.
As you can see, that is a lot of land area to work with. And determining how much an acre of land is worth depends on a variety of factors.
How Much is One Acre of Land Worth?
There is never an easy way to calculate the value of one acre of land. Numerous metrics can determine the value of one acre of land, but the most prevalent metric is the law of supply and demand.
The value of an acre of land can vary depending on how desirable the land is for commercial use relative to market conditions. And the less available access to the land, even in an urban setting, the more expensive it will be.
What other factors determine the worth of an acre of land?
- Is the land located on flat ground or sloping hills?
- Is the land in proximity to paved roads and modern highway systems? Or is it located in a remote area?
- And is the land located to modern utility systems?
These are a few of the questions you must answer to determine the value of an acre.
The average value of an acre in the United States is about $12,000.
Additional Factors That can Help you Determine the Value of an Acre
Numerous factors must be calculated and considered to determine the value of an acre. Here are a few more.
Entitled vs. Speculative Value
If you buy land purely on speculation and in a short time frame, you may be buying land that is vastly underestimated in value.
Buy commercial land based on entitled value. Take the time to get a land survey, assess local ecological impact to your commercial aspirations, consider the intended future operations, and so on.
When you know the entitled value of the acre, the chances are good that it will be more valuable.
The slope of the land can be subtle and not ultimately determined by the naked eye. A topographical land survey can determine the depth, height, and square area of natural land features on the acre.
A topographical survey shows you a 3-D picture of the land and any elements that could make using or building on the ground a problem.
Local zoning laws determine what kinds of buildings and commercial operations can be allowed on land. The local zoning laws can determine the value of an acre of land.
Interested in purchasing commercial land? Consult with Millman Land to facilitate your land survey, zoning, and title service needs.