A friend has bought some land. A 3/10 inch x 100 ft strip of it however appears to be zoned for floods. This raises their insurance premiums a lot. This is in Ohio ftr.
I rekon somone would be willing to buy this strip of land. That there must be some benefit to being a land-owner, regardless of the amount of land. The buyer wouldn’t need to insure the land (since it is unusable) so they don’t get hit for the extra premium.
Surely there is some benefit, be it tax-deduction, or property rights or perhaps residency rights or something, what do I know.
Is my little theory entirely out the window, or does this mini-strip of land have a value to somone?
I’m still not entirely certain what it is you’re asking, so let me see if I understand it right:
You want to know what value, if any, a single 0.3 inch ribbon of land is worth? The answer is, by itself, absolutely nothing. The marginal value to the owner of the adjacent land might be something, but if you asked a person “how much would you pay for a 0.3 inch X 100’ parcel of land?” the answer is zero dollars. There is nothing that can be done with such a parcel of land that would generate any economic value whatsoever, and I can’t imagine what sort of tax-deduction you would get for owning it… mortgage payments are tax deductible, but no banker would ever loan you money with such a parcel as the collateral, since it has no value.
I’m also curious how this person got the idea that there is a 0.3" ribbon of flood zone… is it that a tiny portion of the boundary of his parcel 0.3" is inside a larger adjacent flood zone? Such a tiny portion is generally regarded as of no consequence, and a survey may in fact demostrate that he is entirely outside of it.
I’m also curious as to how a flood determination could be made on a piece of land .3"x100’. Flood maps are just not that accurate. Is this piece of land a ‘flagpole’.
If you think someone would be willing to buy it, I assume that you could do a lot split, making a separate parcel. This should be enough to prevent it from affecting the improved parcel. Don’t see why you would need to sell it. You just need to disassociate it.
They are going through hoops at the moment about the various ways of measuring the land, it may transpire that the strip is not supposed to be zoned.
Maybe what I am asking is if there are any benefits to being a landowner, aside from the actual land/property itsself? For example are there some laws or rights that extend only to people who own property, or does it make it easier to become a resident, or whatever. Any tangental “pros” to owning property in other words.
I rekon if nothing else they could sell the land for a couple bucks on E-bay to somone who would just get a kick out of “owning property”, kind of like the people who buy plots on the moon, a symbolic thing. I am however mainly interested in what actual benefits there might be.
Well, first I just want to acknowledge that you are asking a valid question. There could be some program or benefit that someone wants to qualify for, and one of the requirements could be that the person own land in X state or X county. The trick is finding that person.
Here’s my suggestion: call a bunch of realtors and tell them what’s going on; they may have a client looking for land on the cheap in your area.
I don’t know of any at all. Note that by background is economics, and my current employment is in commercial real estate appraisal/consultation, so I may not be the very best person to answer this question. But I don’t know of any sort of special perks one gets by virtue of owning dirt. Becoming a resident certainly isn’t one, because by law (federal, I believe, but I know at least in Oklahoma) you have to be “not a foreigner” to purchase real estate. You won’t get any tax benefits, you don’t get to cast any extra votes during elections and you don’t get paid money if the battleship or the thimble lands on your parcel…
I can’t imagine who would be running this person through hoops regarding a determination of flood zone… in my dealings with FEMA, tiny little strips of land (especially only 0.3"!!) are just ignored. After all, by definition of a 100-year flood zone, what this means is that statistically speaking, only that ribbon of land would flood on average every 100 years. So, once in 100 years, he would have a 0.3" trickle of water going across his property… not exactly a deluge of biblical proportions. I can’t imagine that FEMA’s got a 0.3" 100-year floodzone defined anywhere, so I assume it’s just that his property extends 0.3" into an adjacent flood zone. If this is the case, it still shouldn’t be a problem unless he’s built a home right up to the lot line… which usually isn’t permitted by zoning or easements or any number of reasons. Just because your land is in flood zone doesn’t mean you have to pay flood insurance, only if the the improvement is in the flood zone.
In the end, though, the value of real estate is determined by what economic value can be appropriated from it, whether in dollar amounts or in less tangible ways (such as a pretty view). And I can’t see any economic value that can be taken from 2.5 square feet of dirt.
On preview, aahala brings up an important point: most cities have minimum lot area requirements depending on what the parcel is zoned. 5,000 SF is a typical minimum. And even if it’s in the country, the county goverment may have zoning requirements for unincorporated areas… so the point may be moot if it’s not even legal to buy such a parcel.
Per the points others have made and questions others have asked (desdinova specifically) I am also a bit confused about the context of your question. I sell commercial real estate for a living and have dealt with flood zone situations several times. With all due respect I get the feeling some major part of this story is missing or confused.
A few observations:
Per desdinova accurate observation 1/3 of an inch being in the flood plain is something that would almost impossible to determine with any real accuracy much less being of concern to an insurer.
Why is this raw land being “insured” in the first place? Unless we’re talking very special circumstances typically the only “insurance” one would pay on raw land is a title insurance policy at purchase and that is a one time payment.
You can certainly attempt “give” the property to the adjacent property owner whose abutting property is already in the flood zone as a freebie, but there are still various legal costs your friend will have to pay for the lawyers or title companies time irrespective of the value, as the real world value of this land will amount to essentially nothing to the adjacent property owner.
I agree with the points made by Astro and others. Something doesn’t add up here. Also, as others have said, you can’t just sell off part of your lot at will. You have to subdivide it first. That’s something that requires governmental approval in every jurisdiction that I’m aware of. And you won’t get that governmental approval, unless perhaps you are selling it to the adjoining landowner.
Assuming (!) that you could split off a section of the property with local approval, the best thing to do to dispose of it would be to do nothing. I.e., don’t pay taxes on it. It will go up for tax auction, no one (with any brains*) will buy it, it’s now Someone Else’s Problem.
*We have 3 “subdivision green space” lots next to us. Idiots keep buying them for ridiculous amounts at tax auction, waste a few years hoping we’ll buy them, stop paying taxes, lather rinse repeat. They won’t even sell them to us for taxes just before the auction. Can’t build on them, can’t cut the trees, one doesn’t even have access.
Here is my guess. Iteki wants to know if he could buy the strip of land and what the consequences would be. If Iteki could buy it, he would be a hero to his friends in Ohio and could tell his friends in Sweden that he owns land in Ohio. Astor and Random have shot that idea down, while giving the very logical answer of giving the land to the adjoining landowner.
[ul] [sup]Something smells fishy in**** Denmark**** about that flood zone.[/sup][/ul]
Actually, if it is in a really high priced neighborhood, there is value in owning “worthless” land. In some cities, you must live, work or own property withing the city borders in order to use their libraries, parks, etc. Some cities around here have those restrictions. Thus, if I lived a couple blocks out of the city limit- but really wanted to use their park/library/etc, then yes, buying a 1" strip for a few bucks would be of value to me. Assuming you could get permission to subdivide. I have seen the sale of a piece of property “the width of a pencil line” somewhere. I also would guess that if a right of way crossed it, you could make some bucks selling that right of way.
This does not seem to fit this instant case, of course, but it does answer the general OP query.
DrDeth, that is exactly the sort of thing I was thinking of.
I am not actually interested in the hows and whys of the land or the flood zone issue, my question is about other benefits of owning land
[sup]Something smells fishy in**** Denmark**** about that flood zone.[/sup][/ul]