What Makes a Lot Profitable? The 4 Key Metrics

Introduction:
Real estate success starts with one key decision: choosing the right lot. But how do you know if a property is a money-maker or a financial trap? These four metrics help you assess profitability before committing a dollar.

1. Buildable Area (FAR-Based)
Lots with higher FAR allow for larger projects. A 5,000 sq. ft. lot with 3.0 FAR gives you 15,000 sq. ft. of buildable space — making it ideal for condos or multi-family housing.

2. Neighborhood Demand and Growth
Emerging areas often yield higher appreciation. Analyze population trends, development activity, and demand for housing or retail in that location.

3. Cost-to-Build vs. Projected Sale or Rent Price
Always compare total construction cost (land + building) to projected sale or rental value. Profit lies in the gap. Our reports help forecast both with reliable comparables.

4. Time to Permit and Development
The quicker you can build, the sooner you can sell or lease. Lots with clear titles and zoning (i.e., “as-of-right” builds) reduce red tape and increase profitability.

Conclusion:
Profitability isn’t magic — it’s math. These four indicators help you avoid risky buys and focus on lots that will reward your time, energy, and capital.