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Plottage

DEFINITION

The process of combining two or more adjacent properties to create one large parcel of land. The purpose of combining lands is to increase the value of the combined land more than the land would be valued separately.

EXPLANATION

There are instances when the value of land is underutilized due to its relatively small size. While location generally serves as the best indicator value, the inadequate size of a property can also greatly affects its property.

Property owners can apply for permits to combine multiple adjoining parcels into a single unified land parcel. By doing this, the average price per square foot increases, thereby making the landowner wealthier than had the property stood on its own. Oftentimes conjoining multiple lands can greatly increase the average cost per square foot. The ability to have one large tract of land, rather than two separate lands greatly increases the ability of the landowner to do various things with the land such as develop a large building or create a large factory. Options such as these greatly increase the value of land.

Land use greatly increases the value of a property and when a property is utilized to its best use, the overall value of the property will be maximized. A landowner that utilizes the concept of plottage by combining multiple properties relates to the concept of highest and best use. The highest and best use is an appraisal method that determines the value of a property according to its maximum use. This method, while though not often employed due to its varying accuracy in appraisals, proves that when a property utilizes plottage, the property’s value will be maximized due to the conjoining on multiple plots of land.

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