Municipal authorities and the local government establish zoning guidelines to govern land usage in particular geographic areas. Zoning laws define and limit what property owners can do with their land based on its location and zone classification.
Tennessee has several zoning classifications, but the zoning classes that are more common in general real estate transactions are residential, commercial and industrial. Residential zoning refers to the areas that have dwellings in them. Commercial zoning applies to land with income-generating potential and customer-serving businesses. Industrial zoning usually describes land that contains manufacturing plants and shops. The zoning classification and applicable laws can affect your real estate investment.
Zoning sets expectations
Zoning districts create uniformity and set expectations for interested real estate buyers. If you purchase a commercial property, it will cost more because you intend to earn from it. You expect commercial real estate to be a better investment than a residential one. You will also want to avoid buying real estate near a manufacturing plant if you plan to use it for residential purposes.
Local governments enact zoning laws so people know what they can and cannot do in the specific zone. It promotes economic development while protecting the living spaces of residents. However, zoning laws are not definite.
Zoning laws change
Zoning can change from one classification to the other, depending on any number of reasons. A zoning change will allow new operational and developmental uses and restrictions on the affected property. Often, real estate value increases when a zoning change transpires, especially when residential zoning becomes commercial or industrial.
Zoning laws will vary in every area, city and county. You must make sure you understand the zoning class and restrictions before investing in real estate. Once you purchase property, you should keep updated with zoning changes to maximize your investment and avoid violating new laws.