Land is something that all real estate must use, but when buying land without existing buildings there are a number of things to look out for.
How flat is the land? Will the land being considered require grading to make the land even and flat? These questions can cost a buyer thousands of dollars if not understood before purchasing.
Is there water or streams on the land that are protected by the government? The government does not allow builders to build near certain waterways. If a piece of land is in a flood plain, it has the potential to make the land worthless.
It is important to know what easements are on the property. Are there powerlines that run across the land? That may make the land much harder or impossible to build on. Is there a road easement running through the property that gives a neighboring parcel access to their site?
Water and Sewer
Is the land connected to public water and sewer? Having access to public utilities can drastically affect a piece of land’s value. Pulling in public utilities in some cases can cost thousands and in other cases can be impossible to achieve.
Eminent domain and future road improvements
It is important to check with the department of transportation to make sure to know of any road improvements that are coming in the future. Sometimes the county or city where the land is located will have plans to widen the road and take a portion of land along a major road way. Other times they will close off access to some land sites and make access for your potential customers much more difficult. The county cuts off access to land in some cases to ease road traffic and eliminate traffic lights. It is possible to buy a land site and then have the government come in and take half the land and make the site useless for your purposes. Researching ahead of time is critical!
Zoning and comprehensive plan
Zoning is one of the biggest issues with land. You must make sure that you research not only the zoning of what is allowed but also the county’s comprehensive plan.
For example, you may find a site that has a hotel on it and the zoning says that you can do retail, but the comp plan calls for 3 story office buildings in that area. The hotel may be grandfathered, but ultimately the county wants an office building there. If you tried to go against the county comprehensive plan, it could prove difficult or impossible. Understanding zoning and the comp plan can save you a lot of time and money in the future.
Generally financing land purchases will require a much larger down payment than buying a property with a building already on it. Expect to put around 50% of the land price as a down payment when financing land.
Freedom Commercial has extensive experience in working with land sales and ground leasing in all different types of zoning. It is important to have an experienced agent working with you to help you avoid pitfalls when purchasing land.