Pay attention to town planning requirements
Category General
Pay attention to town planning requirements
How town and regional planning has an influence on the value of a property
Investing in property situated in a good area and to have property of enduring value is just not enough, Town Planning is one critical element that many property investors should pay attention to when hoping to develop and to maximize on the opportunities present. Town Planning plays a crucial role in the development of your own property.
Purchasing a property is not just about purchasing it in a good location and holding for the long term, it is a lot more is about unlocking a property's true potential and building wealth. Whether you are a new investor or a seasoned one, it is critical to understand what makes up the value of your property as well as the various critical factors toward preserving that value.
The one critical factor that some property investors at times struggle to discover, but that might intensely impact the value of your property, and it being a key influencing element is
town planning. Town Planning is one critical element that many property investors should pay attention to when hoping to develop and to maximize on the opportunities present.
The Impact of Zoning
Zoning laws represent land usage rights a property has and also regulate how the property should be used whether for residential, commercial, industrial or agricultural purposes.
Given the potential value involved, it is essential to recognise that zoning can have a significant impact on any property. So how can zoning impact a value of property?
The impact of zoning can be seen in two folds, one being the current land usage rights and the changes in zoning to accommodate future developments. For instance, specific land might be zoned for agricultural purposes and such land prohibits the development of medium to high density residential developments such as town houses and apartments in terms of zoning laws.
Furthermore, this kind of zoning, therefore, might inspire little appetite for property investors. The changes in zoning represent a good potential value especially if they are exploited
timeously. For instance, land zoned for residential use, but could be potentially rezoned for commercial development as proposed in the municipal spatial development plan. Those properties are more valuable use than a similar property with a single residential zone
where commercial development is prohibited. There is an unavoidable substantial price difference between properties with different zoning rights even if they are adjacent from one
another.
Even if you are purchasing a property with the intention of holding on to it for the long term, as either a home or investment, being knowledgeable on town planning is remains critical. For instance, properties located in prime economic hubs of a suburbs that boast loads of character, the zoning rights of properties within this area is what pulls potential investors.
Another consideration should be made for properties that have heritage status from local authorities in cases where the property is over 60 years. Renovating that dwelling, doing an
extension and even throwing on a new coat of paint can be quite a bit more difficult due to heritage restrictions imposed by authorities. You should know this upfront and
what it means for you as an investor.
Zoning information is easily obtained from the local municipality and most cities and towns now make this information available online.
Land use Restrictions
Some town planning restrictions can be a hurdle to buyers; you might find that restrictions hinder your resale prospects down the track. There might be restrictions on height, style and
even colour. These restrictions do not allow you to do what you want in your property. Understanding the town planning requirements that is critical, as it could impact the scale and size of the addition on your property.
Can a Property Investor/Buyer Benefit from Town Planning?
Town planning can be used to your benefit as well. The restrictions and guidelines might present good value opportunity to unleash the potential of a property with improvements, such as rebuilding, extension of dwelling, building of residential development or even subdivisions. There could be an opportunity that will allow you to buy a warehouse building zoned for industrial purposes and convert it into a student accommodation, capitalising on a
gentrifying suburb. Another example could be buying a property adjacent to land that been
graded and has been rezoned and approved for a shopping centre. The future value of your property will improve rapidly once the shopping centre development commences.
Paying attention to town planning might offer you a heads up pending developmental plans.
It therefore critical to look at each property to analyse its potential value whether it offers the best use. Identifying the town planning requirements of the property you are targeting to buy with the help of a real estate agent can help investors avoid surprises.
If you are looking to buy, it advisable to spend a little effort on researching and understanding which property has what rights in an area that you are pursuing to avoid disappoints in the future.
Author: SA Real Estate Investor Magazine - Cacisa Mgudlulwa
