What is the potential of the land for the construction of development projects?

Investing in land for development projects is one of the most promising ways to value your capital. Land forms the fundamental basis of property development and the right choice of location, size and type of land can mean huge profits. In this article, we will discuss what factors affect the potential of land and what investors and developers should look out for.

Key factors that affect the potential of a plot of land:

1) Location

Site selection is a key factor in the decision to invest in land. Land located in strategic areas close to urban centres, with access to transport infrastructure, schools or recreational areas, tends to have a higher value and offers better appreciation potential. It is important for developers to consider whether the land fits the target group of the project - for example, residential development for families, office space for businesses or retail parks.

2) Zoning and legislation

Before investing in land, it is essential to carefully study the applicable zoning plan. Check whether, is the land zoned for residential, commercial, industrial or other development? The zoning plan will give you information about the current and future use of the land and any restrictions. Changing the zoning plan can make your investment more or less valuable.

3) Land size and topography

The size of the lot shall be appropriate to the intended use. Smaller lots are sufficient for smaller single-family homes or a residential neighborhood, while larger lots are needed for commercial development or multi-story buildings. It is also important to evaluate the terrain - lots with complicated terrain can mean higher building construction costs.

4) Availability of utilities

Land with direct access to utilities such as water, electricity, sewer and gas tends to be more attractive to developers. However, if infrastructure is not available, the cost of building it can significantly reduce the profitability of the project. On the other hand, as the owner, by netting the land, you will increase its eventual sale value.

5) Market and localised demand

Investors should analyze the current demand in the area. It pays to find out what type of property is in demand in the area - for example, single-family homes, apartments, offices or commercial space. Market demand is one of the most important factors that affects the return on investment.

How to increase land value?

1) Change the zoning plan

If the land is currently zoned as agricultural land or for other unusable purposes, you can target a zoning change. This process can be complicated and time-consuming, but if successful, it can significantly increase the value of the land.

2) Securing utilities

Investing in utility connections can increase the potential of a piece of land, especially if there are development or residential projects developing around it.

3) Subdivision or amalgamation of parcels

Smaller parcels can be merged into a larger unit, and conversely, large parcels can be divided into smaller lots, which can increase demand and increase the value of the investment.

4) Negotiating with developers

If you, as an investor, own a piece of land that is attractive for a development project, you often have the option of negotiating directly with the developer for cooperation. This model can give you both an immediate return on the sale and a share of the profits from the project.

Why invest in land?

Investing in land for development projects offers unique opportunities not only for speculative gains, but also for long-term appreciation with effective planning. The right location, infrastructure and market demand are the keys to success. Remember, however, that such projects require careful legal and technical analysis.

Are you considering a land investment? Contact our experts at Porta Invest to help you identify the best opportunities in the market. Together we can create a project that will not only benefit you financially, but also socially.

Our range of investment properties can be found here.

Land is not just an empty piece of land - it's the foundation of any great development project. Therefore, believe that an effective analysis of the potential of the land can ensure a profitable and successful investment!