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There are no mathematical formulas by which the market value of the land can be ascertained. The determination of the market value involves a little amount of guess work which is of quasi – scientific nature. Generally, the market value is based on the sale price of the very property under consideration or by comparing the land whose market value is determined with the instances of sales of similar lands in a similar neighbourhood.
Each plot of land has great influence on the use on which the land is put depending upon the supply and demand in a particular locality. The design of each plot characterises the sale price of land. The market value of the land is governed by various factors which include its location, situation, size and shape, type of locality.
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The value of land mainly depends on the following factors,
- Type of development and potentiality of the village, town, city where it is situated e.g. small village, medium town, large city or a metro city.
- The Locality of the village, town, city in which land is situated i.e. Aristocrat, upper class, middle/poor-abandoned, slums etc.
- Whether it is situated in a commercial area, residential area, industrial area, agricultural area or mixed area.
- Vicinity of obnoxious industries/crematory, graveyard, slaughterhouse, cattle home etc.
- Shape and size of the plot- odd/even/Rectangular etc.
- Whether it is Gau Mukhi/Vyaghra (Wagh) Mukhi?
- Area of land, depth of land, frontage available on road
- Whether it is low lying from the adjoining road?
- Whether it is in flood prone area? HFL, whether affected by monsoon storm?
- Soil type, the effect on the cost of foundation i.e. black cotton soil, marshy land, rocky land etc.
- The width of a road on which it abuts.
- Tenure type, Non-agricultural or Agricultural freehold/leasehold etc.
- Permissible construction on ground floor – 40%, 80%, 100% and so on.
- Whether the title of the property is clear or not? Whether it is mortgaged? Are there any disputes?
- Restriction on development/construction by the local authority.
- Any easement/encumbrances right like right of way, right of water, right of neighbours on the property.
- Effects of Town Planning scheme, D.P./Land acquisition for any public purpose etc.
- Restriction on margins due to the vicinity of Highways, railway, electrical line (HT), waterways, airports etc.
- Maximum height permissible/or No. of stories allowed.
- Possession of the property; with owner/Rented/unauthorised encroachment/encroachment by goons.
Physical & Social Infrastructure:
- The Distance of civic amenities, social infrastructures like railway station, ST depot, schools, markets, hospitals, banks, temples, mosques, garden etc. from plot.
- Availability of Physical infrastructures like water, drainage, electricity, storm water drains, communication etc. available on the plot.
- Parking facilities available.
- Type of development in the vicinity, whether FSI of adjoining plots has been fully exploited.
- FSI permissible and FSI exploitable. FSI may be available but one has to assess whether that much FSI can be exploited commercially i.e. if you build that much area, would you be able to sell it at a profitable rate in given time.
- Commercial potentiality if developed as a Real estate project based on profit estimation.
- Supply quantum of such land in the vicinity.
- Sale instances in the vicinity.