Land Prices Per Acre
Land can be priced many ways: by the lot, by the square foot, by the parcel or by the acre. The pros, however, the old-time speculators and investors who’ve made millions of dollars dealing in cheap rural acreage, are only interested in land prices per acre.
Land sales companies, however, use many ways to hide and camouflage the per-acre price from the public. Sadly, even the largest and most reputable companies engage in this subtle form of deception.
One way is to advertise a 10,000-acre ranch for only $1 million. The unsophisticated buyer would assume that the price is an astonishing $100 per acre. Yet after delving into the facts more deeply, the real estate broker casually mentions that there are only 500 deeded acres, with the other 9,500 acres being state or federal leases. Thus the real per-acre price is $2,000.
Another widespread method, used by many Internet land sellers, is to advertise a lot for “only” $2,995, and state that it is one of the cheapest land deals available. But when it is discovered that the lot size is only one-acre, then the price is really $2,995 per acre—and that isn’t a cheap land price. A cheap per-parcel price can be an illusion, while a cheap per-acre price is where real value can be found.
The same principal applies to a nightclub serving alcohol. The nightclub buys whiskey by the gallon and sells it by the small glass—a very profitable formula. The same basic formula applies when dealing in rural real estate. A person should always concentrate on land prices per acre. In other words, buy large tracts by the acre, and sell small lots by the parcel.