5 Leading Tips to Consider When Buying Residential Land

When buying residential land, there are several things that need to be considered. While you may be tempted by a great deal or an excellent location, failing to do your due diligence can make you regret your decision later on down the road. If you’re in the market for residential land, keep these five leading tips in mind.

1. Never Buy Without First Inspecting the Property

Never buy a piece of property without seeing it and inspecting it firsthand. Get a survey from the current owner, and walk the entire property. Surveying the land can help you pinpoint the best building location, or it can help you uncover some potential issues with the land that may prevent you from using the property as you intended, such as wetlands or environmental hazards.

After walking the property, you’ll have a better idea of how much clearing the property requires and any other potential costs that may be added to the cost of preparing the land for building. Also, consider the area surrounding the property. Is it quiet? Are the neighbors friendly? Does it offer a quick commute? Is it close to amenities? Spend some time in the area at different times of the day to determine whether this is somewhere you would want to live.

2. Make Sure that You Can Build What You Want

Seeing the property isn’t enough to know for sure that you’re getting a good deal. Take it a step further by inquiring with the local planning department about zoning, restrictions and ordinances that may hinder your building plans.

Residential zoning, for example, will restrict your usage to the building of homes or possibly a multi-family development. But there will also be other restrictions, like building height requirements, which may hinder you from using the land as you want. And if the property is located in a subdivision, the homeowners’ association may also have rules that you’ll need to adhere to, such as home style and size. Some even have restrictions on what you can and can’t do with your landscaping. Before you sign on the dotted line, it’s important to make sure that you’ll be able to use the land as you want.

3. Consider All of the Costs

Many land buyers make the mistake of only considering the cost of purchasing the land and the building of a home, but there are other hidden costs involved with property development. These include:

* Clearing of the land
* Closing costs
* The potential removal of environmental hazards
* Installation of a septic tank or well
* The cost to run utility lines (if they aren’t already available)
* Road access issues

There are quite a few potential costs that may wind up significantly increasing the final cost of your project.
Find a builder you can trust, and ask him or her to help you estimate the costs of not only building the home, but preparing the land.

Also, consider the costs of removing environmental hazards (if there are any). These can be significant in some cases, and may not make the project feasible. Environmental hazards can include buried gas or oil tanks. We’ve heard plenty of horror stories of people buying land not knowing that there are environmental hazards, such as the ones listed above, and are unable to even build on the land. And at that point, the land becomes hardly sell-able because you can’t do anything with it.

When setting your budget, always make sure that you allot more than you plan for. It’s not uncommon for newly built homes to cost more than what the owners originally planned for. Like any other development project, there are likely to be surprise costs and complications along the way.

4. Ask About Potential Zone Changes and Road Developments

Before buying, contact your local city or county to find out if any zoning changes are anticipated for the area, or if there are any plans to build or widen roads. Zoning changes may impact your future plans, or leave you in the middle of a now-busy commercial area. The construction or widening of roads may cause you to lose some of your property via eminent domain, or your once-quiet street may soon become a busy, noisy intersection.

These are important things to consider before buying a piece of land, and how much of an impact these factors will have will depend on your plans for the property and your personal preference.

5. Get Help from Professionals

Buying residential land is really no different than buying real estate. Unless you have no plans for the property, you’ll likely want to consult with professionals to determine how feasible your plans are.

* A real estate agent can help you through the buying process by taking care of the documentation, negotiation and closing process.
* A builder can estimate the cost of building the home, and the costs of preparing the land.
* A surveyor will help you gain a clear understanding of the property’s borders.
* An environmental engineering company can perform an environmental assessment to check for any hazards or environmental issues you may face when building your home.

Working with professionals who are experienced with various aspects of the land buying process can help ensure that you don’t buy a piece of property you regret.

One final tip: Talk to lenders early on about construction loans. Unless you have the cash on hand, you’ll need to obtain a construction loan to build your home. Inquire with local banks and lenders to see if you’re eligible for financing. Construction loans are not always easy to obtain, especially considering today’s financial landscape, so it’s a good idea to get a jumpstart on this as early on as possible.

Residential land is easy to find, but finding the perfect property is a challenge. Use these tips to find land that will permit you to build what you want, is free of costly environmental hazards, and will not cost a fortune to clear. If you fail to research the property properly and consider all costs, you may find yourself in over your head or left with a property that you sorely regret buying.