Skip to main content
No. of Recommendations: 1
The property has a creek running through it and the original owner built right next to that creek. The house would not be permitted today because of set-back requirements. In fact, if there were a significant fire, it is unlikely we would be allowed to rebuild.

Does this make the land worthless such that all the value is in the house for depreciation purposes?

I doubt it. All land has some type of value. And if you can build elsewhere on the site, even if it's not on the original foundation, the land would have residential building lot value. Even if you can't rebuild at all, it would still have some value.

As an example, my road runs along a bluff that has newer setback requirements that would not allow most of the houses on the bluff side of the road to be rebuilt. In fact, one of the houses was condemned because the bluff eroded enough so that the septic tank was exposed. Before the house was condemned, the lot was valued at ~$160k, as a residential lot. After the house was condemned and torn down, the lot is still valued at ~$60k, even though it's not buildable. You could possibly park an RV on it, or use it for pasture.

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.