Thinking of buying vacant land? These do’s and don’ts may help.
THINGS TO DO AND NOT DO WHEN BUYING VACANT LAND
If you’ve already bought a home and now want to try your hand at buying vacant land, be prepared for a whole new ballgame. Whether you’re planning to build your dream home on this vacant piece of land, or you hope to sell it for a profit in the future, these do’s and don’ts can help you avoid buyer’s remorse.
DO’S FOR BUYING VACANT LAND
- DO work with a real estate agent – While buying vacant land seems less complicated, it can actually be more so than buying a home. Make sure to work with an agent who has experience in land transactions to ensure you get the help and understanding you need to have a hassle-free buying experience.
- DO organize your finances – Most land purchases are made with cash rather than a loan, so be sure you have access to the amount of cash you need. If your funds are tied up in other investments, make sure to pull them out before making an offer on a piece of land.
- DO remember to include utilities and road access in your plans – If you’re building your dream home on the land you purchase, be sure to include the cost of running utilities to the home and supplying road access if there isn’t any.
- DO consider incentives – Consider taking advantage of incentives offered by the federal government in areas ravaged by natural disaster. This could give you a valuable piece of land at a low price.
DON’TS OF BUYING VACANT LAND
- DON’T expect a loan – A vacant piece of land has nothing to leverage for a loan. Lenders usually won’t finance vacant land.
- DON’T forgo environmental testing – Many environmental factors go into whether a piece of land is a good investment or not. It needs to be evaluated by a professional to ensure you can do with it what you plan.
- DON’T neglect the survey – The land should be surveyed to identify its boundaries.
- DON’T talk to the neighbors – While talking with the neighbors is a good idea when purchasing a home, discussing your plans to build on a vacant piece of land may only serve to fuel opposition from neighbors who don’t want you to build. Save making friends with the neighbors until after you’ve built and moved in.
- DON’T count on having property rezoned – The governing body over your vacant piece of land likely has rules and restrictions when it comes to how you build and what you build on it. Rather than think you can apply for and change the zoning laws for your land, choose a parcel that meets your needs while staying within the existing zoning laws to keep things hassle-free.
It may seem less difficult to buy a vacant piece of land than a home because there is no existing dwelling on it, but the opposite is actually true. If you’re thinking of buying vacant land, be sure you understand these do’s and don’ts before you begin shopping.