Buying land is a great move whether you’re looking to develop it and profit from it or use it for personal use. It’s an asset that doesn’t lose value and depending on your purchasing decisions and what you do with it, it can prove to be more valuable than most of your investment portfolio.
However, there are also a lot of risks in buying land.
Here are 10 questions you need to ask before you buy land to minimize your risk.
1: How are You Financing it?
First, you need to figure out how you’re going to finance the purchase.
Land purchases aren’t as easy to find financing for as homes are. The majority of banks won’t allow loans for raw land purchases, and if they do, the loan terms are typically far stricter than something like a home mortgage.
Before you start wondering about anything else on this list, find a lender willing to work with you specifically for a land purchase.
2: How Much Would It Cost to Make it Livable?
You should always ask how much it will cost to make the land livable. You can’t just buy the land, put a cookie-cutter house on a random part of it, and call it a day. You have to worry about how much it will cost to have electricity, water, and gas installed, create accessibility paths, building in safe areas on the land, and more.
3: Can You Profit Off Trees on the Land?
If you’re buying more than 25 acres of wooded land, ask what type of wood is there. If the wood is valuable, you might be able to offset your building costs by selling the timber that you’ll already be cutting down, anyway.
4: Ask About Water Sources
You need to know about any streams, ponds, creeks, or other bodies of water on the land. Specifically, you need to know how prone they are to flooding, what their elevation levels are in comparison to where you’ll be building, and whether or not they’re viable resources.
5: Is There Elevated Building Ground?
You do not want to build at the bottom of a hill or on perfectly flat land with lots of water surrounding your building zone. Your newly built home will soon be flooded if you do. Ask if there is an elevated portion of the land suitable for building on.
6: What are the Taxes?
Property taxes are something you’ll have to deal with as long as you have the property. Figure out how much they are before you buy.
7: What is the Property Like in Person?
Properties for sale can look and feel a lot different than it looks in photos. Ask for an in-person description of the land.
8: Is it Buildable?
Unless you want a bunch of raw land, ask if the property is suitable for building in the first place.
9: How Accessible is it?
If you have to create a 500-yard driveway just to get to the property in a practical manner, your costs will increase dramatically. Ask how accessible it is before you buy it.
10: What are the Property Lines?
Rural populations rely heavily on property lines because they’re not as recognizable as they are in urban situations. You should ask what the property lines are before you buy to make sure you’re getting the land you want and not encroaching on someone else’s property.
In conclusion, buying land can be a complex and costly process, so it’s important to do your due diligence beforehand. The above questions you need to ask before you buy land are just a few of the key considerations you should make before making a purchase. From the cost of making the land livable to the type of trees on the land to the accessibility and property lines, these questions can help ensure that you make a wise investment. By taking the time to thoroughly research the property you’re interested in and asking the right questions, you’ll increase your chances of buying a piece of land that meets your needs and is worth your investment.