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Why is this land priced as it is?


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http://www.rightmove.co.uk/property-for-sale/property-34889922.html?utm_content=v2-ealertspropertyimage&utm_medium=email&utm_source=emailupdates&utm_campaign=emailupdates3day&utm_term=buying&sc_id=11267463&onetime_FromEmail=true

 

There are 2 plots for sale here, it's the 2nd one that puzzles me.

 

It has some sort of protected agricultural tenancy on it, which I guess means you can't just kick the tenants off the land. They pay a rent of £600 a year.

 

The suggested auction price is in the region of £60,000

 

Which means a 1% ROI for the new owner... Which is worse than you'd get in a bank account, even with the terrible interest rates available today.

 

So how is the land worth the suggested price?

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It's not really, but you see land pop up for sale all the time.

 

They can ask whatever guide price they like, but realistically the number of people out there willing to buy it is sod all.

 

If it was ripe for development it would sell quick, so it could depend on that tenancy and any building restrictions placed on the land.

But if it's 'green belt, agriculture only' land then no-one will be paying 60k for it.

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Plenty of better options tho, 60K will get you a house.

A house will return better rents, and is sure to appreciate nicely.

 

The land on the other hand, might appreciate and returns rubbish rent.

 

from a financial view it's not a good place to put your money, and really would probably only appeal so someone local - like the farmer who currently rents it.

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Plenty of better options tho, 60K will get you a house.

A house will return better rents, and is sure to appreciate nicely.

 

The land on the other hand, might appreciate and returns rubbish rent.

 

from a financial view it's not a good place to put your money, and really would probably only appeal so someone local - like the farmer who currently rents it.

 

If his tenancy is assured and protected surely he wouldn't pay what amounts to 100 years rent up front?

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I'd imagine that the chance of getting planning permission on either plot is zero. And the 2nd plot being completely pointless due to having a tenant you can't get rid of!

 

So, you could own a field and some woods, but one you can't use because of a tenant, and the other has multiple footpaths running over it, so you can't make it at all private or do much with it. (I know, I walked over it just last week on my evening walk).

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Depends on the type on tenancy. Even a protected tenancy (e.g. 1986 Act) ends sometime. You would probably have to have good local knowledge to know if this was the case for this land. Perhaps the price reflects the probability of the tenancy ending in the near future?

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If his tenancy is assured and protected surely he wouldn't pay what amounts to 100 years rent up front?

 

No I mean it'd only really appeal to the farmer if he thought it would be an investment.

So he'd continue using it as a paddock or whatever, then 20 years later look to sell it on for a profit.

 

Anyone else looking at it would see, expensive land, poor return.

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No I mean it'd only really appeal to the farmer if he thought it would be an investment.

So he'd continue using it as a paddock or whatever, then 20 years later look to sell it on for a profit.

 

Anyone else looking at it would see, expensive land, poor return.

 

Right..................

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