Property Investment

CRITICAL THINGS TO EVALUATE WHEN BUYING LAND AS PART OF YOUR DUE DILIGENCE

2 Mins read

Land ownership has a lot of advantages. First and foremost, owning land can result in fantastic returns. Land is typically regarded as a long-term, tangible, useful asset with a finite supply. Long-term trends have demonstrated that land will continue to appreciate over time since there is a limited quantity of it.

An overview of due diligence for land development - Colorado Real Estate Journal

However, you may lose resources if you buy the wrong kind of land for your investment strategy. You have to conduct your due diligence to avoid such pitfalls. Here are the key evaluations:

Location

Your investment objectives and how you want to profit from them will determine the location. For instance, seek land in a residential area with appropriate zoning if you intend to sell individual residential lots or build a subdivision. If you wish to acquire and hold ground because it is in a location with the potential for commercial growth, review traffic patterns, zoning, and population density to ensure the site can be developed. Examine the distances to schools and other amenities before purchasing land in a neighborhood that hosts mostly young families.

Potential Zoning Issues

Every land has a zoning designation that outlines the permitted uses for the area. Depending on your location, there are various zoning categories. When purchasing land, you must check on current and upcoming zoning changes to make sure they support your goals, which is why using a land real estate company in Harrison County, MO, is helpful.

The main divisions are:

  • Residential: Admits single-family dwellings
  • Multifamily: Allows for single-family residences and multifamily dwellings such as duplexes, triplexes, fourplexes, and apartment complexes.
  • Agricultural: Used for ranches, farms, and similar establishments. This zoning occasionally permits single-family residences and modest multi-unit structures like duplexes.
  • Commercial: Approves establishments like offices, shops, and occasionally hotels.
  • Industrial: Usually used to describe factories, warehouses, and light manufacturing.

These zoning designations can be rezoned, which may address or create new issues.

Real Estate Taxes

Owning land has fewer costs than other real estate investments. After purchasing land as an investment, property taxes are the sole recurring cost except a mortgage payment. Therefore, before closing, be sure you know the taxes. You can search for tax records online on the city’s tax collector’s website or contact them by phone. Make sure you earn enough to pay the taxes, and if you intend to keep the property, account for any tax rises.

Physical Features of The Property

Investors who have never purchased land might assume that most lots vary in size and topography. If you are not diligent and aware of its physical features, you could easily buy a piece of worthless land. Observe the following physical traits in particular:

  • Accessibility: For your land purchase to be successful, it must have road access. Landlocked parcels are difficult to sell or profit from since other properties border them and have no driveway or road access.
  • Flood zones: Many plots of land remain underdeveloped due to their location. You might never be able to construct anything in flood zones, or you might not be able to insure any buildings.
  • Environmental problems: Environmental difficulties could arise, such as environmentally sensitive places, including wetlands, ecosystems, wildlife zones, tribal territories, and national parks.

Utility Accessibility

Gas and electricity might be accessible, but you might have to bring them to the lot line, which might be expensive. LandProz Real Estate LLC can help you research the utilities you’ll need, their accessibility, and the costs associated with putting them on the property when acquiring land.

Conclusion

Other considerations for buying vacant land include land ownership history, use restrictions, building requirements, and land surveys. Take your time to find the ideal piece of land for your needs.

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