The Basics of Buying Land
Why do you want land? Do you want to:
- Buy and hold with the possibility of big profits when an area expands?
- Buy and hold with the possibility that a certain area is about to become "discovered" and prices will explode?
- Own a getaway place in the mountains or on a body of water?
- Own a large chuck for future subdivision?
- Own the perfect place to build your new home?
Whatever you're buying, you need to make certain that you know the boundaries. If there has been no survey, you're wise to insist upon one. If there is a recorded survey, insist on seeing the pins. In rural areas especially, lines can become blurred over time. People sometimes built fences in the easiest location… not necessarily on the property lines. So don't assume.
After that, your reason for buying will determine the amount of research you'll need to do before you sign on the dotted line.
For instance, if you want to buy and hold for future expansion, you need to look at the growth potential of the city, including the ability of its infrastructure to support future growth. Research city government as well, to make sure that developers won't be "shot down" before they can even get started.
If you're buying on speculation that an area will be discovered and prices will rise, you need to consider both the infrastructure and the quality of the neighborhood. Don't buy in a downtrodden area unless you see clear signs that the existing population is working to improve and revitalize the neighborhood.
If you merely want a "getaway" place all you really need to know is that you love it and that the road will get you there.
If you want to buy a large parcel to subdivide, you need to do a lot of research.
- Find out the city or county ordinances that govern subdivision.
- Some counties require subdivisions to build roads that are better than the public roads that serve them.
- Some counties require extensive storm water plans
- If you intend to connect to city services, make sure that the infrastructure will support your plans.
- Take the pulse of the current residents… will they fight you?
- Check to see how many other vacant parcels are available… is the market ready for more? Will the current selling prices support your expense for subdivision?
- Check with the power company to make sure you won't be hit with a huge expense for bringing power to your sites.
- Make sure the existing zoning regulations allow for the size lots you want to create.
- If multi-unit housing is a part of your plan, make sure zoning allows for it.
- Always assume that each step will take twice as long as you planned.
If you're searching for a home site you have to consider all the same things you would consider when searching for a home:
- Convenience of the location
- Neighborhood amenities
- The neighbors themselves
- Condition of nearby homes
- How you "feel" when you're on the property
In addition, you need to research the zoning to make sure you can build the home you envision, the infrastructure and cost to hook up to services, the tax structure, any Covenants, Conditions, and Restrictions that will affect how you live, and future developments planned for the area.
If you're planning to build on rural property with no city services, be sure to research the water table, availability of electricity and phone, and the availability of septic permits. Soil conditions greatly affect both availability and cost, so make sure you're not buying a parcel where septics are prohibited.
Land is a sound investment. After all, they're not making any more of it. So unless you buy in a flood plane or on a steep hillside where the forces of nature are apt to move it away, it will always be there for you. And in most cases, the price won't go down.
Click here to contact me if you have any questions.
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