Will business zoning increase the value of your property?
If you have the right mix of items and have a large enough wallet, this may be your ticket to retirement. But sometimes, it is your ticket to the house of the poor.
I looked at a house that is divided into mixed-use zones. In this area, this means that you can use the residence as a home or use the residence as a business site. These types of sites are generally limited to low-impact items such as office buildings, apartments, etc.
What’s the trick? Well, you will have to own a parcel of land large enough for a business deal to work. That’s why you see five houses along a busy street all for sale at once and the zoning is commercial. This is because to be approved for commercial development, there must be a parcel large enough for commercial development to work.
Typically, for mixed residential zoning, these areas are close to town or close to other apartments or businesses in the area. I have appraised several of these types of property. Many times, advertising zoning as mixed use is enough to sell the home for more just because it can attract that specific buyer who wants to live in the same home and run a business from home. One home I evaluated offered a living room on the main level and a naturally lit basement offered office buildings for rent.
I understand that some banks that specialize in residential zoning do not lend money on mixed-use properties. This, of course, is a wreck, if you are trying to get a home loan. Some buyers will not want to use their residential home for office use. This will limit the number of buyers who may want to buy your home.
So will commercial zoning increase the value of your property? If your home is a residential home with the best use for residential use, business zoning can lower the value of your home and make it difficult to obtain a loan and make it difficult to sell, because it will be located on a busy street. If your house is for residential use and the best and highest use is to build a commercial structure, most of the time, your land used for commercial use will be more valuable than your home used for residential use.
So the moral of the story is to keep an open mind about these types of properties. The other day I looked at some houses where the house is an older residential house with a larger lot. Zoning can be changed from residential to commercial for $ 1,500. Residential homes with larger lots with similar zoning sold for $ 350,000 to $ 400,000. Residential homes that were moved to commercial zoning were selling for $ 500,000 to $ 700,000. So for $ 1500 and some time, this would be a good bang for your buck.