Plottage is defined as the “increase in value achieved by combining small, undeveloped tracts of land into larger tracts.”
Many times, this term is used in conjunction with assemblage.
Assemblage refers to the actual process of combining individual parcels.
The value of the combined properties by way of assemblage is generally greater than the value of the sum of the individual parcels. This increase in value is known as the plottage increment. This is why you can notice a big difference (in developed areas) between the price of a quarter-acre vacant lot versus a half-acre lot.
At Real Estate Kingz, we have developed a proprietary formula that provides a linear price progression for vacant land. With our formula, we can accurately provide an estimate of value for your vacant land both pre- and post-assemblage.
The Downsides of Assemblage?
The downsides of assemblage are more prevalent in commercial real estate ventures than in individual home buyers.
When individuals attempt to assemble to build their dream home, the process is quite definitive; either the land is available at the price the buyer wants to pay at the time of purchase, or it isn’t.
For the individual, when an assemblage of particular lots isn’t cost-effective or viable, the individual moves on to the next area to attempt the assemblage.
However, with commercial investors, because the assemblage usually includes the assemblage of large and small tracts of land from numerous owners, the process could become lengthy and expensive.
For example. I owned a home on a quarter-acre lot. I planned to purchase the five adjacent lots, perform the assemblage, then renovate and expand my house to create an awe-inspiring estate.
Well, acquiring the first lot was well along with the second lot. But the remaining three lots proved to be very problematic. This resulted in me selling the home and the lots to venture elsewhere in my attempt to create my perfect homestead property.
Remember, the value of an assemblage in an appraisal is usually an increase in property value. Suppose you’re looking for property in Florida. In that case, I can help you with assemblage and even finding one piece of property that satisfies your requirements as you look to create your perfect Florida homestead property.
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