Considerations for Buying Land
Have you ever had this experience? You’re driving in your favorite vacation area and see a gorgeous piece of property, ocean view, mountains behind, no neighbors, and your first thought is, “Why don’t we just buy some land and build on it?” Good question. Buying land is particularly appealing if you consider yourself a staunch individualist, wanting things precisely the way you want them—your design, your locale, your land. There’s a lot to consider, however, so here is some of what’s involved. Raw or Improved Land Raw land refers to land which is available for building but has no improvements such as water, electricity, and roads. In other words, you will need to arrange for a well or access to town water. You will need to tap into an electricity grid, unless you are planning to go “off-grid” with your own electric source such as solar. And, you will have to access public sewage systems or put in your own septic system. Improved land implies the water, electricity hook-up, and sewage system are already in place. This happens if the land is part of a development or the previous owners began the improvements. In either case, you still want to insure that the utilities are adequate for your needs. Will it work? For your piece of land to become your vacation home, you’ll need to do a little research. Is the zoning okay? Is the size of the land acceptable for the size of the house? Can you insure sewage, water, and electricity? In buying raw land, it is essential to do some tests about the availability of water and the ability of the soil to handle the sewage. Working with a realtor who knows the area will make these questions simple to research. Master Plans and Zoning Another consideration for your land is what will be happening around your land in the next 10 to 20 years. Most communities have master plans that are viewable by the public. There’s nothing worse than buying your idyllic property, building the home, and then discovering it is right next to the planned shopping mall, local quarry, or worse, the newest road. Looking at the master plan, you also want to consider the zoning both for your land and the neighboring land. Is it all agriculture? Is some of it commercial? What is the minimum lot size in that area? For example, if you buy 10 acres, and discover that the minimum lot size is half-acre, you could find yourself in the midst of very dense housing in the future. Finally, remember to consider the environment. The ability to build on a piece of land must conform to the local environmental considerations. Finances The costs of building vary depending on what you build. For example, a simple pre-fab house runs $80,000 and up while Haiku houses, Japanese-style kits, cost from $400,000 to $1,000,000. Another financial consideration for land is that it does not get the same tax benefits as a second home. Therefore, it is more prudent to build on it fairly soon, rather than just hold on to it. Also, mortgages may be higher or more difficult to obtain on raw land. In Brief Remember, the benefit in buying land is that you decide what to build, how much to spend, and where the house sits on the lot. If you are willing to do the work, the end-result will be tailored made to match your vacation dreams.