Lot Values (sales, real estate, rental)

[Transplant13]

I was looking at Collin County CAD link that a realtor sent me. It gives value of the land and value of the structure, does that matter?

[BigDGeek]

Originally Posted by Transplant13

I was looking at Collin County CAD link that a realtor sent me. It gives value of the land and value of the structure, does that matter?

Why do you ask?

[Transplant13]

To know if it is of any importance when buying a property in USA.

[bencronin04]

I think lot value is going to be much more important. You can't change the lot location, you can always change whats on the lot.

[Squirl]

It does matter if you are renting out a property and depreciating the value on your tax return. The land can't be depreciated, but the structure can be. So, in the landlord world if your business plan is rental income vs. property appreciation then lot value being less than structure value is beneficial.

[JTC Mom]

I am not sure I understand the poll question but in most of DFW and Texas, the lot value is significantly lower than the value of the building structure. In the highest cost areas such as Park Cities, the ratio of lot value to value of structure is significantly higher. We live in an "average" home in HP and on DCAD it shows our lot value is slightly higher than structure value...and based on a (very) few lot sales nearby in the last year, I think that is about right. In most other areas, especially suburbs where there is a lot of new construction, it is much more common for the lot value to be far below the structure value.

[Mulching]

Lot values matter, that's the reason builders can build huge McMansions in exurbs for so little but exact replicas cost hundreds of thousands more in any established inner core suburb with decent schools. If you see American homes during construction then you'll value your lot value a whole lot more. We build match stick houses.

[Transplant13]

Does that mean it is better to buy a house with higher land value vs one with higher structure value? I am sorry this is all new and confusing for me so just trying to understand it better.

[JTC Mom]

I think of it this way...the house structure depreciates in value over time while the land could either appreciate, depreciate or stay the same, depending on its location. So the "investment" in your real estate is in the land, while the structure itself is more of a consumption good. As to which is better...investment is better than consumption for building wealth...but consumption is better for quality of life in the moment.

[Tripolar]

I would like it if at least there is half of the value of the house is in land.