There are all kinds of reasons why you might be interested in purchasing vacant land. Perhaps you want to build a home or a business of some sort, and purchasing a lot allows you to get both the location and the structure of your dreams in a way that already-developed properties can’t. Or maybe you’re looking for a good place to put your money for a while and a tangible asset seems safer than the stock market. Maybe you’re hoping that buying in a growing area will allow for a quick flip when you purchase a large tract that home builders will be interested in (in other words, you engage in land speculation). But regardless of your reasons for wanting to purchase vacant land, it’s important to understand that it is very different than investing in real estate that already features a structure and the many amenities that come with it. Before you put your money on the table, there are a few important factors you’ll want to consider.
- Location. Whether you’re buying a house or an empty lot, location is always important. You can certainly buy land in the middle of nowhere, either to develop or to sell at a later date, but if you plan on reselling at some point, you need to think about the potential interest in the property. Purchasing land in a populated area may be more expensive initially, but you’re bound to enjoy a larger market for resale as a result, whereas land in the boonies simply might not attract the same number of buyers down the line. Of course, purchasing on the outskirts of a growing area and waiting for expansion could be extremely lucrative. You simply have to consider your goals for usage or resale before you select a location to buy.
- Cost. There’s really no getting around the fact that cost is a factor. Sure, we’d all love to buy a vacant lot in Manhattan, but few of us could pony up the dough to win that multi-million-dollar bid. The goal is generally to get the best possible price on a lot that suits your purposes. And whether you develop it or simply sit on it until the value increases, you need to be careful not to overextend when it comes to the cost.
- Zoning, ordinances, etc. The nice thing about buying developed land is that you don’t have to jump through a lot of hoops since the builders have already gone through the legal aspects associated with developing the property. But when you buy land, it’s important to understand that in order to build you need to adhere to zoning restrictions and any local ordinances or covenants that are already in place when you make your purchase. If you buy outside of city limits, you might not have to worry about the latter two, but nearly all land sales are subject to zoning. So whether you’re looking to build a home, you want to erect a business structure, or you’re interested in hosting livestock on your property, you should find out beforehand about any restrictions that could throw a wrench in the works.
- Prior use. Before you buy any vacant land you need to look into prior usage, and this could mean doing a survey, running tests, and searching for easements, just for example. A land survey will mark the exact boundaries of a lot (ensuring that neighbors aren’t overstepping the line), tests of soil and water samples can help you to determine whether your land is conducive to farming or if it has been contaminated by chemicals, just for example, and the search for easements will let you know if you have rights to the water, minerals, and other aspects of your property.
- Market for resale. When buying land, it’s not always easy to know how much interest there will be for resale. For this reason it’s not a bad idea to hire a qualified and reputable vendor like Lone Eagle Land Brokerage, Inc. to help you find the property that meets your needs and offers the investment opportunities you seek.
Finding the right home insurance is not only desirable, it is required when you take out a home loan so that the lender can recoup costs in the event of property damage or loss. But of course, the more important thing is that you, the homeowner, is fully protected in case a tornado tears up
If you’re a first-time homebuyer, that is something that you definitely should be proud of. Not only does it represent being a property owner, but it also symbolizes independence and financial stability too. In fact, out of all of the investments that you could possibly make, purchasing a house is one of the best possible