Some people prefer to buy vacant land for constructing a new home or an investment property. The purchase of land is indeed an exciting one, and sometimes land buyers - especially first-timers - get overwhelmed with emotions that result in a botched purchase. They sideline the crucial considerations when buying vacant land. 

If you’re a newbie to land buying or someone who wants to get an advantageous deal, a land-buying guide might help. So, in this blog post, we give you a list of things you should consider when purchasing vacant land for building a new home or investment property. 

Location

When buying vacant land, the location is crucial. The market value of the land depends partly on its location. If it’s located in a “hot” neighborhood, you can expect that it has a considerable market value. For folks who want to buy land to build a house on it, choosing a desirable location can give you a higher return on investment. 

Consider the current or potential developments and economic growth of a location. You can tell that by the new businesses, infrastructure works, and public amenities in the area. It’s also crucial to read local economic forecasts in the newspaper and media. 

Once you have constructed a house on the land, homebuyers will take interest in your property, and there’s more probability you can sell it at a higher price. 

Zoning

Land buyers should also consider the zoning type of the property they want to buy. In a given municipality, the local government divides certain areas into zones. Zoning ensures that land is used to its maximum efficiency or livability. A property owner will likely be against the zoning ordinance if he builds an industrial building in a residential area and vice versa. 

That’s why if you plan to buy land, you should know the zoning type of a location and the restrictions and land usage that apply to that zone. Take note of these common types of zoning if you want to purchase a real estate property. 

• Residential. A zoning designation intended for the construction of dwelling units and houses. 

• Commercial. A land area designated for commercial buildings and structures, such as supermarkets, malls, restaurants, theaters, offices, etc.

• Industrial. A type of zoning designated for the operation of large manufacturing facilities and factories. 

• Rural. A zoning designation for the operation of agricultural facilities, farmlands, poultries, and similar enterprises. 

Building Codes & Ordinances

Before constructing a home or building on the land, it’s crucial to learn about the local building codes and ordinances. These local laws ensure the safety of your building and structures. 

You can hire an engineer or contractor who is familiar with building codes and ordinances in the locality you want to build your property. It’s also crucial to know about the standard regulations regarding plumbing and electricity in the area. 

Survey the Land

Knowing the size, topography, and boundaries of the land is crucial when buying vacant land. In this case, you need to hire a licensed land surveyor to determine the measurement and dimension of the property.

After the survey is completed, you’ll have a certified plan of the land with important information, such as the area and lot boundary lines. 

Land Loan

Getting a land loan is different from obtaining a standard mortgage. So, if you need financing for your land purchase, you should know about the pros and cons of getting a land loan. Know also where you can obtain this type of financing. You can opt for seller financing or a home equity loan for this matter. 

Make sure that you have good credit to avail of affordable borrowing costs. You also need to survey the land first because lenders want to know the boundaries, land-use restrictions, access to public roads/utilities, and zoning of the property. 

Know How Much Will It Cost You

Of course, the most crucial thing to consider is the costs involved in buying vacant land. Calculate how much the cost of the surveying, title insurance, and land. There’s also the cost of installing water, electricity, and other essential utilities. Moreover, take note of the construction expenses before you start building a house or structures on the land. 

You should set a budget for the costs associated with your land purchase. You don’t want to lose a considerable amount of money in the process. Also, it’s crucial to calculate the ROI of this type of property investment. 

Takeaway

Some challenges await you when you’re planning to buy vacant land. That’s why you need to study the pros and cons and know what you need to prioritize to ensure that you get an advantageous deal. Consider the location, type of zoning, building codes, surveying, access to public utilities/roads, and the costs when purchasing vacant land.