What to Know Before Purchasing a Vacant Lot
Getting into the real estate game can be good fun, as well as a good long-term investment. Whether you’re a first-time buyer, or you flip houses for a living, there are plenty of options on the market in any given state, especially when you’re talking about investment properties.
Some properties are better than others for certain people, depending on your short and long-term goals. If you’ve considered buying a vacant lot, but aren’t quite sure what’s involved in that process, or what your profit might be if you plan to sell it down the line, Fripp Island Real Estate is here to break down the details for you. Read on to learn more about what you need to know before you purchase a vacant lot, whether it’s in the Fripp Island neighborhood or somewhere else in the country.
Determine Your Plans
Purchasing a vacant lot is a lot like buying a blank canvas: the possibilities are endless. You could build a home and use it as a rental property, you could build a home for you and your family to live in, you could build a retail space, or you could drop a tiny house on the property and call it a day. No matter what your plans might be, determine a direction you want to move in.
If you’ll be building a home and flipping the property, your investment is short-term. If you plan to hang on to the lot for more than 5 or 10 years, you might be in it for the long-term profit when it comes time to sell.
Knowing what your plans are can help you find the right property; after all, not every property is right for every person’s goals.
Do the Research
According to How Stuff Works, one of the biggest traps people fall into with purchasing vacant lots is that they jump in without considering contingencies. If you purchased a house that had a 30-year old roof, you might plan to replace it someday, which could impact the price you’re willing to pay for the home. While there isn’t typically a structure on a vacant lot, unexpected costs can come up, so it’s important to do your homework before you sign on the dotted line.
Stauffer & Sons suggest asking the city about natural resource rights associated with the property. There might be restrictions on what you can do with the land if, for example, it’s near a lake that’s used for drinking water.
Make sure your building plans for the lot will be approved with the city and town zoning committees—some vacant lots won’t allow certain types of structures to be built, so it’s important to double check with the town before you purchase.
Ask if plumbing and electrical have been run to the lot; if not, expect an added expense to have all of your utilizes set up.
And, ask if the town plans to run any roads through the area in the near future; if they’re building a highway and plan to run a portion of it right along your property line, it might not be the ideal place to build.
Choose Wisely: Location, Location, Location
The location of your lot is important, but the location that will work best for you depends on what your plans are for the property. Consider things like school zones if you have young kids, or plan to in the future. If your property is in a remote area, it may not be zoned yet for the local public schools. Talk to the city about how that process will work so that you know which school district you’ll be zoned to.
Does the property have road access? If you drove up on a mud or gravel road, consider the cost—and the potential headache—of working with the town to lay public roads in the area. If you’ll privately own the roads, and are allowed to pave them, there’s additional cost involved in laying asphalt, too.
If you want to use the property as an investment, consider things like timber trade and the eventual development of the area. Will it turn into a cool vacation getaway in a few years? Will the local timber companies come knocking on your door, asking to purchase or rent your property? Both of these instances could mean that it will be a very lucrative investment, but make sure you have a good understanding of the town’s real estate market and plans for the future before diving in.
Natural Hazard Disclosure
The Balances says you should obtain a natural hazard disclosure from the county to look for soil issues before purchasing. Some areas may have naturally occurring asbestos or extremely high radon levels, which might not make the land an ideal place to build a home.
Another expense you might need to pay with a vacant lot, regardless of what your plans are for the property, is surveying. Check with the town to see how recently your property was surveyed, and if it was more than a few years ago, you should plan on spending a bit of money to have professional surveyors come out. The cost of the survey will largely depend on the size and terrain of the property.
Purchasing a vacant lot can be an overwhelming process for many buyers, especially when there are a lot of unknowns. The real estate agent you’re working with will be able to answer a lot of these questions for you; just make sure you ask them! If you’re interested in purchasing a vacant lot in the Fripp Island neighborhood, click here to view our listings and call John Lee today at 843-575-2820 for more information!