On the surface, buying a piece of land may seem fairly basic. There’s dirt, some grass, and hopefully a promising location. But just like purchasing a home, a purchase of this size and magnitude requires some homework. Whether you plan to build a house on the lot, keep the property as an investment, or develop a business on that spot, there is plenty you should know before investing in property. Here are a few of the basics:
Location. The first and most important rule for buying a lot is location, location, location. No matter what the reason for buying the property, you never want to buy land with no resale value, especially if the land is for investment. If you plan to build a house on the property, you need to make sure the property is approved by the health department.
Hidden or Unknown Costs. The more time you spend preparing to purchase the land, the more ready you’ll be to spend money wisely. Several additional fees that may be associated with buying land include insurance, property tax, closing costs, and money to install septic and to hook up to city water if applicable.
Zoning Restrictions. The zoning laws determine what can and can’t be done on this property. Make sure to pay attention to the county’s long-term land use plans and scheduled road additions. Those will dictate future construction for this site.
Utilities. Any vacant lot you’re eyeing for a home or business will need utility access. You’ll want some or all of those piped into your property when construction begins. Vacant lots that aren’t close enough to water and sewage lines will also need wells and septic systems to gain access to these two utilities. That means added expenses and added hassle, as you’ll need permits for installing a septic system.
Flood Plain. Flooding is a powerfully destructive force that can cost you thousands of dollars. To assure that the property you desire is not in a floodplain, first check the plats. Past research on the land may already have this fact defined by mapping out the property’s elevation, but if that work is not done, you will need to hire a surveyor to determine if your property is in a flood zone.
Permits. One fact of real estate you need to learn early, is that just about everything you build is going to require a permit. Before starting construction on your lot, you will have to deal with government zoning. Construction permits help protect the land and stick with building codes that deter from building structures that may collapse or be built improperly. Although the process is tedious, it does ensure a solid, completely legal investment for you.
In order to make a profitable investment and to protect that investment, remember that buying a lot is more than just picking out a picturesque spot in a nice area. Do your homework and your investment will pay off.