What is the value of assemblage in an appraisal?
Assemblage and Plottage
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.
What is the value of assemblage in an appraisal?
The value of the combined properties post-assemblage is generally greater than the value of the sum of the individual parcels. This increase in value is known as the plottage increment. Hence, notice big differences (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. Our formula provides a linear price progression for vacant land. Because of this, 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 to commercial real estate ventures versus individual home buyers.
Individuals attempting assemblage to build their dream home, the process is quite definitive. Either the land is available at the price the buyer wants to pay, or it isn’t.
For the individual, when assemblage of particular lots isn’t cost effective or viable, the individual simply 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. My plan was to purchase the five adjacent lots, perform the assemblage, then renovate and expand my home to create one really nice estate.
Well, acquiring the first lot went 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 assemblage in an appraisal is usually an increase in property value.
If you’re looking for property in Florida, I can help you with assemblage and even finding one piece of property that satisfies your requirements as you look to also create your perfect Florida homestead property.
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