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Robert Webb
RE/MAX REAL ESTATE (MOUNTAIN VIEW)
401,9650 HARVEST HILLS BLVD.NE, Calgary, Alberta
P: 403-408-6654
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Tuesday, May 16, 2017 - What exactly is a lot and how does it determine your homes worth?

What exactly is a lot and how does it determine your homes worth?

Recently a young friend of mine told me about a property he had seen next to his rental, he was surprised to find out it was selling for just over 600K.  He said he was looking in some newer neighborhoods at house prices and they were around the same 600K price. He asked me:


"why would I buy an older home for the same price as a new home?"


The answer is all about the zoning and the dirt.
​​

The Value of Homes - Defined by one of Calgary's Top Realtors
The value of your property is like a bullseye - the closer to downtown, the higher the price for land, and less for home, the more suburban the higher the price for the home and lower price for land. 

Older properties that are closer to the city center are called “inner city” and the price of the lot in an inner city property is more valuable because there is little supply unlike properties in developments on the edges of the city where lots are readily available.

In most cases, inner-city properties are zoned as RC2 properties as opposed to a lot of the outer edge properties where the majority are zoned RC1.

The difference is that on a standard 50x120  RC1 lot the RC1 zoning says you can only build one residence on that lot.

An RC2 zoning says that on that same standard 50x120 lot you can split the lot in two and have two properties on that lot.

There are a lot of these structures in the inner city neighborhoods and they are usually referred to as infills. So if an investor is interested in purchasing that RC2 inner city home for 600K he can now remove the existing home and build two new infills at a resale average value of 700K. in essence that opens up a new class of buyer for the owner of an inner city property.

The value of the land, zoning and location create the value for the inner city lot.
The value of the new development home is not so much the dirt but the home. The house is brand new with all the recent amenities and design fashions. The furnace is new the hot water tank is new, the neighborhood is new with new streets, lighting and parks.  In a word, everything is new.
So the value of the new community home is the home.

To sum it up, the answer is as old as the dirt…typically the older the dirt the more valuable the lot!

 

posted in General at Tue, 16 May 2017 09:23:29 -0600



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