CHAPTER 42

Calculation 36: Land Measurements

What It Means

Anyone who gets involved in real estate, whether as an investor or just a homeowner, needs to understand the basics of land measurement. You will almost always describe a parcel’s size in terms of its area. If the parcel is a perfect rectangle, you calculate the area by multiplying length times width. If the land is in the form of anything but a perfect rectangle, you might need to get into some serious geometry in order to come up with an accurate measurement. That’s a job better left to a professional. Unless you are trying to subdivide a larger piece, it is also a job that probably has been completed already by the local tax assessor; you should be able to find out the size of any existing lot by checking the assessor’s records.

Measuring the land is not really a job for you as an investor, but you should understand how those measurements are expressed and how to convert among the ways of describing lot size.

In the United States, you typically describe land in terms of acres or square feet. One acre equals 43,560 square feet. In countries that use the metric system, you usually describe land in terms of hectares. One hectare is a little less than 2.5 acres.

Investors often talk about commercial land in terms of square feet in the same way they talk about commercial buildings. The square foot serves as a unit of comparison. It is not uncommon to hear someone say that she purchased a piece of land for $3 per square foot or that she leased the land to a developer for $1 per square foot.

The square footage of the land can also be important because local zoning laws may prescribe the maximum building footprint or the maximum gross building area in relation to the number of square feet of land.

Occasionally, land is described in terms of its “front feet,” that is, the number of feet of road frontage. A municipality may describe a piece of land this way when figuring out how to charge you for your share of the installation of a sewer line in front of your property. If your land has 100 feet of road frontage, then the city or town will be inclined to charge you for 100 feet of excavation and pipe, regardless of how deep the lot is. Another time that you may hear a property’s size described in terms of front footage is when the land is suitable for retail use. The more exposure the property has to passing traffic, the more valuable it is likely to be. Even though two parcels might lie very close to each other, exhibit substantial similarity in most respects, and contain the same total area, the piece with the greatest number of front feet—and hence the greatest public exposure—would usually command the higher price.

How to Calculate

You should know how to convert between acres and square feet because you’ll hear one or the other of these terms used to describe the land portion of every property you encounter.

We’ve also listed a number of other useful conversion factors. You won’t use these nearly as often, but now you’ll know where to find them when you need them. Keep in mind that some of these factors have been rounded:

Example

A building offered for sale sits on 0.24 acre. How many square feet of land does that equal? The adjacent property has 30,000 square feet of land. How many acres does that equal?

First property:

Square Feet = Acres × 43,560

Square Feet = 0.24 × 43,560

Square Feet = 10,454

Second property:

Acres = Square Feet × 0.000023

Acres = 30,000 × 0.000023

Acres = 0.69

Test Your Understanding

You own a piece of commercial land in the shape shown here:

1.  What is the square footage of this parcel?

2.  What is its area in acres?

3.  A foreign investor asks you what the area of this parcel is in hectares. What is your answer?

Answer

Look at the parcel as being made of two attached rectangles:

1. The area in square feet is the sum of the areas of the two rectangles:

225 × 300 = 67,500

125 × 125 = 15,625

Total = 83,125 square feet

2. Acres = Square Feet × 0.000023

Acres = 83,125 × 0.000023

Acres = 1.92

3. Hectares = Acres × 0.4046856

Hectares = 1.92 × 0.4046856

Hectares = 0.78