Have a house on a busy street or land next to a mixed used development not actually zoned commercial? Well you probably have thought about whether or not it is a commercial property and the value is greater then a typical residential home or site. I think with these 3 tests you can decided pretty swiftly which way to go when valuing your property for sale and save everyone a lot of heartache and time not taking the wrong direction. Its easy to say that your property should be commercial and many times a busy road or recent growth in an area can muddy that up and create a flurry of excitement but many times its just that and nothing actually comes of it. The time it takes for residential property to convert to commercial organically is decades and sometimes generation so knowing what you have is key and not getting caught up in the real estate hype can be a blessing. Here are my 3 signals.
Overlay – Is your property planned commercial? Many times the local authority will place an overlay or business overlay in an area to attract commercial development and give some guidance as to where and what may be expected without an actual zoning change. This is public information and in fast growth communities the planners will set aside certain areas that they would like to see commercial property being developed and many times that just happens to be a row of homes along a busy road. Check with you city or county and they should be able to give you this information.
Next Door – By stepping out your front door and looking both left and right you may learn more then from any other source. The closer to an intersection the more accurate this can become and just stepping outside may resolve any questions. Is there a gas station or office building adjacent to your property? Are you between two commercial developments? If so you may easily qualify for commercial pricing.
Control – Do you have a large parcel that may be hundreds of feet from a neighbor on a busy street? Well that gives you a lot of control and may benefit you with this. One of the main reasons zoning does not work for some properties is that the neighbors do not want a commercial user next door. If you do not have the worry of neighbors or adjacent owners unwilling to be commercial this may be a great candidate for commercial users.
The surest way to get a commercial valuation on a property is to be zoned commercial by the local zoning authority, but in fast growth areas where prospecting and development outpaces current uses, converting your property from a residential to a commercial property can mean a much higher sales price. But just because you want it to be a commercial property does not mean it ever will be. Consult with a local expert of course.