Before you break ground on any development project, you need to purchase the right parcel of land (lot). During your search, you’ll find that there are several different designations that represent lot conditions. Often, the cost and scope of a development project depends on lot condition and the improvements required to get the land ready for building.
Here’s a brief guide to the common types of lot conditions you’ll run into, and what they mean in terms of cost, effort and timeline prior to development.
1. Raw Land
Almost any building lot that’s marked for development but remains untouched can be considered “raw land.” These plots haven’t been cleared of vegetation or other debris and obstructions. The natural topography remains intact, with drainage and wet areas present, along with the wildlife that call these habitats their home. These lots are truly “rough.”
Developers who intend to build on raw land must first inspect the ground and determine whether it’s suitable for a potential project. If the lot meets requirements, developers can start planning lot improvements and begin the site development process.
If you end up purchasing raw land, count on undertaking everything in the land development process, including land clearing and site grading. Developers need to account for slopes and hills, and analyze the approach to rough grading necessary to alleviate any drainage concerns.
Other factors to consider include availability of utilities and other infrastructure to serve the property. Developers must confirm which municipalities or private utility companies currently serve the area and whether they have capacity to serve the project. In many cases, utilities, roadways and other infrastructure must be added in order to serve the proposed development.
2. Entitled Lots
Entitled lots have been through early development planning stages and have been approved for construction. While no improvements have been made to entitled lots, all of the time-consuming zoning and municipal filings are in line. Essentially, the lot is ready for development.
Entitled lots are very desirable since they’ve already been through the tedious, time-consuming approval process. Whoever buys an entitled lot can hit the ground running. Since developers need a return on their money (fast) an entitled property saves both time and risk from their bottom line, which almost always leads to cost savings in the end.
It isn’t uncommon for developers to spend months (or even years) waiting for approvals on lots before construction. Consider this as you determine whether an entitled lot is a good value for your money.
3. Blue-Top Lots
A lot that’s already been through the early stages of land development—like clearing and basic leveling—is often called a blue-top lot. While no utilities are installed and the building pad itself isn’t in place, these lots are much further in the development process than raw land or even entitled lots.
Blue-top lots have typically received rough grading, which is where they get their name. The “blue-top” refers to the blue whiskers or ribbons placed in the ground to show graders where the finish grade elevation is. Typically, the seller has rough-graded all the pads including the street gutter section.
Blue-top lots are ready for more detailed work (like finished grading), as well as any underground improvements.
4. Finished Building Lots
Sellers offering finished building lots have not only graded the property, they’ve also installed all necessary underground utilities, including both wet ones like sewer lines and dry ones like electric, telephone, gas or TV lines. There’s not much to do in the way of grading or site prep on these lots, which means developers can get right to their build phases.
Finished building lots are often hot commodities. Not only are all the time-consuming approvals done, the tough jobs of grading and utility installation are complete, too. These lots often offer a quicker return on investment, since developers can immediately hit the ground running when it comes to building the actual finished structure as planned.
5. Broken Land Lots
A broken land lot is a lot that’s in poor shape, often with infrastructure that’s in disrepair. It’s literally a “broken” plot of land. Broken lots have usually gone through several stages of initial development, but the funding has dried up for one reason or another, and construction crews have packed up and left the site in as-is condition.
While broken lots can come at a bargain, developers should do their due diligence and perform lots of research and investigation. You’ll often need to explore underground, discovering what’s already been installed and what hasn’t—and what condition it’s in. Remember, workers picked up and took off mid-job, so much of the work hasn’t made it to the finish line. It could be up to you to do it right, and that could be costly and time-consuming.
Land Development has Many Starting Points
Need help finding a lot that matches your project and your budget? Sandbox Development understands that the lot you choose for your property has a big impact on the land development process and the overall cost to finish a project. Contact us today, and our consultants will help you select the lot that’s right for your project.