Rural Real Estate – Know Your Risks
Rural real estate seems to be a hot trend for investors, but is it really a good investment?
The thought behind buying rural real estate seems to be there is only so much land, and therefore the value can only go up in price. By buying a quiet property out in the middle of nowhere, you can live peacefully and possibly earn a nice return on your dollar if suburbia expands.
Unfortunately it seems many people are duped into buying rural land and end up stuck with a piece of property that is virtually worthless. Take Paula, who shared her biggest financial mistake. Paula and her husband were newlyweds invited to enjoy a nice vacation and take a look at some land in Colorado. The hosts got them excited about the opportunity to make money as a “soon to be ski resorts” was in the works, and they took a gamble and bought the rural real estate. It’s now 10 years later, and they are still trying to pay off the land they can’t even build on.
There are countless other stories just like this where couples go on a vacation and find a nice quiet lot with a for sale sign and think how wonderful it would be to get away from the busy life. Only after they buy their rural piece of land do they find out they over paid for property that is essentially worthless.
If you are going to buy rural land as an investment, don’t do it on a weekend binge, and make sure you do your own due diligence. There are certain things that you have to take into consideration that may not even cross the suburbanite’s mind, such as:
- Is there a well for water?
- Is the property accessible during the spring when it rains, or does the land around the property flood?
- Does it have public access to sewage, septic, electricity and roads?
- Will the public school bus come out there?
- Is the land suitable to build on, or is the ground too soft?
- What will it cost to get the phone company to come out there, and is there any way to get internet access?
- What kind of wildlife will you have to ward off?
- Are the boundaries clearly defined?
If you think you are getting a great deal on an inexpensive piece of rural real estate, check with the city on the items listed above. Generally speaking, the farther away you are from civilization, the more expensive it will be to build and have these services brought out to your property. There’s a good chance your great deal might have been someone else’s headache.
Millionaire Money Habit: With any kind of investment you make, it is critical that you do your own due diligence and fully understand what you are getting into. Don’t buy something with your hard-earned money on emotion. Take your time, sleep on it and make sure everything checks out. “Opportunities of a lifetime” can end up being your biggest nightmare.