Acreage Property Roads- What to Consider?

Acreage Property Roads- What to Consider?

In my market area, a substantial percentage of my appraisal assignments are country, acreage properties. These assignments rarely involve homes that are apples to apples comparables.  I typically have to look at a variety of sales and find aspects of a property that are similar to the subject. One component with rural properties that can vary more than suburban type SFRs are road considerations.  Let’s explore the topic a bit.

1) What is the surface of the street?

In my market area, I see a variety of surfaces ranging from asphalt, chip/seal, gravel and at times dirt. Can road surface impact the market value of the home? Probably not asphalt or chip/seal, but I pay more attention to gravel or dirt.  I observe the distance condition of the road with gravel/dirt. What is the condition? Is it maintained? Are there bumps? Is dirt creating a dust trail? How long is the road to the subject property- 1/4 or 2 miles?  There are some roads in my market area that meander on dirt/gravel roads for miles and can take up to 10 minutes or more to travel a relatively short distance.  When this occurs, I certainly want to find comps with similar road surface influences.  Other times a quick 2 minute drive on a dirt/gravel road may have less impact on marketability.

2) Is the location near main road arteries, highways or town? Rise of acreage properties used for cannabis?

Sometimes gravel/dirt roads are near main roads or highways with only a short time drive time. Other times, it can take up to 10-20 minutes just to get to the main roads or highways. This can be subjective as certain buyers want the distance/privacy away from others while others prefer the quicker main road/highway access.

How far away is the property from town or a gas station? An acreage property that is private and minutes away from town can have great appeal. I’ve come across many properties like this that certainly sold at a premium when compared to the same property located 10 minutes further away for example.

With the legalization of cannabis in CA, more acreage properties have areas for cannabis growth. A buyer who intends on legally growing cannabis may find a property that meanders down long gravel/dirt desirable due to privacy, setting, etc. These are new factors to consider, and again, always important to show market support for properties similar in location.

Because the nature of this road component is at times subjective, I always have comparable support for the locations of the subject to show marketability/support.

3) Private Roads- road maintenance fees? Easements?

There are many roads in my market areas that are private roads. Many of these roads have informal agreements among owners to maintain the road. Other agreements have annual road maintenance fees. This gray area and another consideration. It may be a positive to pay, for example, $500 a year into a fund that is used to maintain the road. This may avoid issues and hiccups when it’s time to repave/seal the road. Other times, owners are perfectly fine having an informal agreement.

It’s important to note any road easements as well when investigating a property. It can be overlooked when purchasing a property, but it’s important to know exactly what title states regarding easement rights, etc.

Conclusion-

Summarizing, I hope these sub topics centered around roads/location help give some considerations to exploring and investigating rural acreage properties.  Buyers are looking for different aspects to a property and it’s important to acknowledge this as appraisers and research the market and what it is telling us. There are definitely other factors as well- what can you add?

 

Bryan Lynch
Certified Real Estate Appraiser
Office: 530-878-1688
Bryanclynch@gmail.com

 

Disclaimer: All information deemed reliable but not guaranteed. The information is meant entirely for educational purposes and casual reading only and is NOT intended for any other use.  This information is NOT intended to support an opinion of value for your appraisal needs or any sort of value conclusion for a loan, litigation, tax appeal or other potential real estate or non real estate purpose. This appraiser is NOT a qualified home inspector and any tips are for informative purposes only. If you’d like to obtain and order an appraisal for your specific needs, please contact Bryan at 530-878-1688 for more information.

2 Comments
  • Joe Lynch
    Posted at 14:45h, 04 October

    Good post Bryan. I had a property a couple of years ago at the top of a steep gravel driveway. I wasn’t comfortable driving my Acura RSX up the driveway and could support a 5-10% negative adjustment just for the driveway.

    I also look at distances to services. I cover the Capay Valley which sells at a discount compared to homes near Woodland (hospitals, supermarkets, jobs). Once again, pretty easy to show this discount.

    • Bryan Lynch
      Posted at 14:48h, 04 October

      Thanks Joe…always appreciate your input! Great point with driveway- I’ve been on similar driveways as well. I was on a long dirt road recently that prompted this discussion.