The way an area develops and grows is dependent of the government zoning regulations. As a property investor it is important for you to know how these regulations are affecting the property now, and in the future.
The zoning determines what is legally allowed and not allowed concerning the land. It determines its use such as industrial or commercial, or residential or agricultural. The zoning dictates what can be done with the land.
Counsel decides the applicable zoning:
They develop a plan that is comprised of planning instruments. A written document is produced that includes color coding on the map and uses tables and descriptions as to the permitted use of the land. These plans are segregated into zones. The common zones can be residential, commercial, industrial and agricultural. These categories are then broke down to be even more specific, and will vary according to each state.
Residential zoning impact:
Zoning is not just important to the large property developers, but is also highly important to the individual investors. The zoning can have a major effect on the worth of the property.
What the property is presently being used for may not be the best use for it in its present location. The better use may be for townhouses whereas now it is zoned for medium residential density.
You need to know the square footage and potential height to know what the zoning regulations will allow in respect to any additions you want to make or other alterations to what exists there now.
What’s going on beside you:
Knowing what the zoning regulations are for the adjoining properties will help to avoid any unwanted surprises. Looking at the zoning map for these areas will inform you as to what can and cannot be done with the neighbouring property.
There could be special overlay zoning in place for heritage protection, or for the future protection of the citizens. Knowing what special overlays may be in place can help with the negotiations on the purchase or selling of the property.
Potential zoning changes:
It is not uncommon for governments to change the zoning regulations to keep up with the demands that population growth creates, or what environmental changes are dictating.
A rezoning could include the change of use of the land parcel for the betterment or detriment of the property owned. It takes a formal amendment to change the zoning of land.
At times developers will apply for rezoning of land with the mandate to create higher property returns.
Those that are investing in property will be able to make much better and informed decisions if they educate themselves on the zoning regulations that could have an effect on their investment property. It can help to determine if the zoning is compatible with what the investor intends on doing with the property. It can help with the negotiations in respect to the price being asked for or being offer in regards to buying and selling.