Land & Lot

Overview

When purchasing land, particularly in rural areas, understanding how to manage and move utilities is crucial. Assessing the availability and cost of essential services like water, sewer, and electricity is the first step. Rural properties often require significant investment to bring utilities to the site, which can range from $10,000 to over $30,000. It’s important to gather precise information on the proximity of these services and to be prepared for additional costs related to installing wells, connecting to municipal water systems, or exploring alternative energy solutions. Also, consider the space needed for septic systems and familiarize yourself with local regulations and permit processes, as these can impact your development timeline and budget.

When buying land, start by evaluating your financing options and obtaining pre-approval to set your budget. Be sure to account for extra expenses, such as closing fees, property taxes, and development costs. Thoroughly research the property’s zoning laws, environmental regulations, and soil quality to ensure it meets your needs. Conduct due diligence through professional surveys, environmental tests, and title searches. Partnering with a real estate agent can help you navigate the market and secure a favorable deal. Avoid common pitfalls like overlooking environmental assessments or assuming you can easily rezone the property, as these can lead to unexpected complications and expenses.

Land Buying Tips: How to Buy Land

Determine Your Financing Options

Understand your financial situation and decide whether you will purchase the land with cash or through financing.
If opting for financing, research the various loan options available for land purchases. Land loans typically require larger down payments and may have different terms compared to standard home mortgages.
Get pre-approved for a loan to determine how much you can borrow and to clearly define your budgetary constraints.

Calculate Your Budget

Determine your budget based on your financing options and the amount you can afford to spend on the land.
When considering a purchase, be sure to factor in not only the purchase price but also additional costs such as closing expenses, property taxes, and potential development fees.

Understand Land Loan Types

Different types of land require different loan types, each with its own down payment and credit score requirements.
Banks consider raw land loans to be riskier, so they usually require larger down payments and higher credit scores. Improved and unimproved land loans may have lower down payment requirements.

Find the Right Piece of Land

Utilize various resources such as real estate agents, online listings, and land marketplaces to search for suitable land options.
Consider factors such as location, size, zoning regulations, access to utilities, and proximity to amenities.

Conduct Due Diligence

Research the property thoroughly to understand its suitability for your needs and any potential challenges.
Investigate zoning laws, environmental regulations, soil quality, water and sewer capacity, and other factors that may impact development.
Consider enlisting the expertise of professionals such as land surveyors, environmental consultants, and real estate attorneys to assist with the due diligence process.

Make Your Offer in Writing

Draft a written offer outlining the terms and conditions of the purchase, including any contingencies.
Contingencies may include securing financing, conducting inspections, obtaining necessary permits, and ensuring a clear title.

Conduct Environmental Tests

Perform environmental assessments to identify any contamination or hazards on the property.
Tests may include soil testing, water quality testing, and evaluations for potential environmental liabilities.

Conduct a Survey

Hire a licensed surveyor to conduct a boundary survey and identify the exact property lines.
Using a survey can help prevent boundary disputes or encroachments on the property.

Conduct a Title Search

Obtain a title search to review the property’s ownership history and uncover any liens, easements, or title defects.
A clear title is essential to ensure that you have legal ownership of the property.

Have a Thorough In-Person Visit

Make sure to personally visit the property to assess its condition, topography, and the surrounding area.
Walk the entire property to evaluate its suitability for your intended use and to identify any potential issues or concerns.

Close the Deal

Once all conditions are satisfied and the financing is secured, proceed with the closing process. Execute the necessary legal paperwork, cover the closing expenses, and finalize the transfer of ownership.

Explore Ways to Buy Land Cheaply

Consider alternative methods such as searching local listings, negotiating with sellers, or seeking properties that have been on the market for an extended period.
Explore options for owner financing or negotiating a delayed closing to save money on upfront costs.

Do's and Don'ts of Buying Vacant Land

Do's

Work with an agent to find the land: Real estate agents can help navigate the market, find suitable properties, and negotiate deals. Their expertise streamlines the buying process and ensures you make informed decisions.
Have your finances in order: Before searching for vacant land, ensure your finances are in order. Establish your budget, arrange financing if needed, and be prepared for additional costs like taxes, utilities, and development expenses.
Consider the value of homes in the neighborhood: Evaluate property values in the surrounding area to assess the potential appreciation of your land. Higher home values may indicate a desirable location and future growth prospects.
Take utilities and road access into account: Evaluate the accessibility of services like water, electricity, and sewer connections. Additionally, consider road access and transportation infrastructure to ensure convenience and accessibility.
Consider incentives: Research potential incentives or programs offered by local authorities or government agencies for land development projects. Incentives such as tax benefits, financial aid, or subsidies may be available to encourage property development.

Don'ts

Don’t expect to get a loan: Securing financing for vacant land can be more challenging than for traditional home loans. Lenders may view vacant land as a higher-risk investment, requiring larger down payments and higher interest rates. Be prepared for potential financing hurdles and explore alternative funding options.
Don’t skip the environmental tests: Conduct thorough environmental assessments, including soil tests and site evaluations, to identify any potential hazards or constraints on the land. Environmental issues can impact development plans and incur costly remediation expenses if overlooked.
Don’t forget the survey: Obtain a professional land survey to accurately determine property boundaries, easements, and encroachments. A survey ensures legal compliance and prevents boundary disputes with neighboring landowners.
Don’t talk to the neighbors: While being neighborly is important, avoid discussing your land purchase or development plans with neighboring property owners until after the transaction is complete. Premature discussions can lead to conflicts or unwanted attention.
Don’t assume you can have property rezoned: Verify local zoning regulations and land-use restrictions before purchasing vacant land. Rezoning can be a lengthy and uncertain process, requiring approval from local authorities and public hearings. Ensure your intended land use aligns with existing zoning laws to avoid complications.

Bringing Utilities to Vacant Land

Checking for Utilities

Before purchasing vacant land, it’s crucial to determine whether utilities such as water, sewer, and power are available. The development of the land could be greatly impacted by this, affecting both cost and feasibility.
Utilize online resources, county GIS maps, or contact local planning and zoning departments to inquire about utility availability in the area.
Lack of utilities, especially in rural areas, may require additional investment and planning to develop the land.

Understanding Proximity of Utilities:

While sellers may mention “nearby utilities,” it’s essential to clarify the exact distance and accessibility of utility connections.
Vague descriptions of nearby utilities can lead to misconceptions and unexpected costs during development.
Ensure you have precise information about utility access before making a purchase decision.

Cost Variations:

Bringing utilities to vacant land can incur significant expenses, influenced by factors such as location, distance to existing infrastructure, and local regulations.
The cost of the project and service providers’ pricing can range from $10,000 to over $30,000, depending on the complexity.
Obtain estimates from local utility companies or contractors to assess potential expenses accurately.

Availability of Municipal Water:

Access to municipal water may not be feasible for all properties, especially in rural or remote areas.
Installing a well or connecting to a municipal water system involves costs and regulatory requirements.
Consider factors such as water quality, availability of water rights, and installation expenses when evaluating water options.

Neighbor Permissions and Easements:

Installing utilities may require easements or permissions from neighboring property owners.
Be aware of potential legal requirements and community regulations regarding utility installations.
Collaborate with neighbors and local authorities to address any easement issues effectively.

Water Quality Testing:

If relying on well water, regular testing is essential to ensure water quality and safety.
Ensure that tests are conducted for contaminants like bacteria, nitrates, and dissolved solids to meet health standards.
Promptly address any water quality issues to maintain a safe water supply.

Exploring Electricity Options:

Evaluate various electricity options, including connecting to the local power grid, installing alternative energy sources like solar or wind, or using backup generators.
When selecting electricity solutions, consider factors like cost, reliability, and environmental impact.
Consult with local utility providers and contractors to identify the most appropriate choice for your property.

Space Requirements for Septic Systems:

Installing a septic system requires adequate space and adherence to regulatory guidelines.
Consider land area, soil composition, and legal requirements when planning septic system installations.
Factor in potential limitations on land use due to septic system placement and maintenance.

Project Timeline Considerations:

Utility installations typically require a significant amount of time, from obtaining permits to completing construction.
Expect delays due to regulatory approvals, weather conditions, and unforeseen challenges during the project.
Plan for an extended timeline and allocate resources accordingly to manage expectations and mitigate delays.

Financial Investment:

Bringing utilities to vacant land involves a substantial financial investment, which may not be feasible for all buyers.
Assess your budget, financial resources, and long-term development plans before committing to utility installations.
Consider alternative options or recreational land use if utility development costs exceed your budget constraints.

Decision-Making Complexity:

Utility development projects require careful consideration of various factors and decision-making processes.
Evaluate utility options, regulatory requirements, and budget constraints to make informed decisions about land development.
Remember to consult with experts and thoroughly investigate to effectively handle the complexities of utility installations.

Compliance with Local Regulations:

It is crucial to follow local laws and regulations when installing utilities on undeveloped land to ensure success.
Make sure to understand zoning laws, permit requirements, and environmental regulations to stay in compliance with the law.
Seek guidance from local authorities and legal professionals to manage regulatory intricacies and prevent potential legal issues.

Try to rent lots and lands out to neighbors for a super low price and if not for anything else rent it to them for just the tax amount. Write up a contract and instruct them not to put any permanent structures on the lot. You may have to clear and level it off some but you can easily make your money back from this and you could sell the cut timber for firewood and use the soil and rocks to level off the lot or land. You can also rent the lot for a community garden or parking etc