3 ms·
Lot A has 1 single family unit. Land: 300K. Building: 600K. Total per unit 900K You subdivide and build another house on the lot with building value 300K. Tota
by hammock 2y ago
Lot A has 1 single family unit. Land: 300K. Building: 600K. Total per unit 900K
You subdivide and build another house on the lot with building value 300K. Total land value appreciates 50K.
Outcome
Unit 1 land 175 + building 600, total 775 (and the owner gets 175 for the land they subdivided and sold off , coming out ahead 50k in cash)
Unit 2 land 175 + building 300, total 475.
Average unit cost on the lot is now (775 and 475) = 625 (30% decrease)