10 Key Indicators To Identify Predeveloped Real Estate

Flat land is significantly less expensive to develop, as opposed to land that varies in elevation, and is therefore more attractive to a developer. Land must be usable and developable.  There are several barriers to development such as land that is in a conservation area, land that does not have clear legal easements [access], or land that has a limited use due to local or regional governing restrictions.  It is critical to know of and confirm that all such obstructions to use and development have been removed or do not exist prior to investing in land; a single barrier can render a parcel of land worthless. 

Check all major sources, such as the US Census Bureau, for population projections and studies validating that the area you are looking to invest in is growing.  As population growth places an overwhelming demand on a declining finite supply of available land, the remaining parcels of land become exponentially more valuable.

An area must have an abundant water supply in order to accommodate sustainable growth and development.  Land without accessibility to an abundant water source has limited development potential.

An area must have a master plan for government infrastructures such as streets, highways, etc.  Master-planned infrastructures provide the foundation for traffic best routes and creating service areas.  They greatly affect in-town movement and traffic.

Freeways, airports, and railroads provide the framework for greater accessibility to a developing area.  Anyone can attest to the positive economic impact a freeway, airport, or rail has on an area.

An area in the path of growth must have adequate utilities such as electricity, telephone, gas, cables, etc.  Lack of any utility will curtail potential growth patterns.

A growth area must already have commercial, residential, and industrial developments with the assurance of more to come.  Commercial, residential, and industrial developments provide a sustainable job base for the local population and a tax base/revenue for the local city to use for expansion.  As a city receives more revenue they are able to provide more infrastructure (e.g. streets, traffic lights, etc.) which in turn attracts more developers and more people to the area.  The value of a parcel of land is a function of the total economic stimulus surrounding that parcel.

The natural growth pattern of a metropolitan city is for the population to grow outward from a focal point.  To remain in the path of growth you want to stay within a defined radius of the epicenter of a metropolitan city.

To accommodate and expand population growth there must be sufficient educational facilities, hospitals, and other public related services.

Having a diversified job base creates stability in a growing local economy.  As industries tend to be cyclical, in the event one industry is not doing well other industries will continue to provide advancement to the area.  Affordable housing attracts population and it is necessary to have varying levels of affordable housing for varying levels of income to accommodate the diversified work force.