Its easy to overlook some of the basic things when investing in land or buying land to build a dream vacation house which can be costly later. Whether buying land as a investment property or looking for a vacation home site, land investing has few key items and buyers should not overlook. We have compiled a list of nine items, that will hopefully help buying and in making any informed decisions.
1. Clear Title – Often land purchase is through a individual seller or a private party and not through an real estate agent. Its important for the land to have clear title with no pending liens. Clear chain of title is important to make the title marketable which ensures that buyer will be able to sell the property later when time comes. Title companies are best at making sure that title is clear. They go back several years to make sure title was passed properly to new owners and offer insurance to buyers. This is particularly important if buyer plan to build something on the land. Sometimes issues in title can pop up after several years of passing the ownership. Paying for a good title insurance is suggested to all end buyers.
2. Financing – In today’s tough market, banks look land as passive investment and are conservative on lending for land. Unless the buyers have a excellent credit history, it can be tough on getting the bank loan approved. As a result you may looses a great deal on land. One option is to negotiate for seller financing, terms for which are completely up to the seller and the buyer.
3. Identifying Property Location – Undeveloped land often does not have a postal address. It may have if the land is in a developed community, but chances are it does not. In such cases, to identify the property location, you may need the GPS coordinated, or you can start working from the plat map which is available with county where land is located. The county may be able to help further in identifying the driving directions to the property. Incorrect property identification and making a purchase decision based on that could be a costly mistake. Land clearing Melbourne
4. Dimensions & Property line – Where as exact location will have weight when starting to construct on vacant land, it is also important to make sure the neighboring properties have not over developed on to the land you are planning to buy. As having that fix could prove costly.
5. Zoning – County offices keep a record of every piece of land and this must be checked before purchasing the land to make sure you will be able to use it as intended. It is possible to get a zoning variance later however this is very limited and may not happen.
6. Utilities – Its common for vacant land to be outside of service areas for local utility companies like electric, gas, sewer and water. List also goes on to include cable, telephone etc. Where as all offer a substitute, for example septic system, portable water, dish etc, however all substitutes may not be feasible all the time. Adding a new service line or going for alternatives could be a costly later.
7. Annual taxes – Often ignored, this component adds up to the property holding costs, especially of the buyer does not plan to build immediately. The cost may offset if the land value appreciates, but may not also.
8. Annual association dues – Depending on where the property is located, it may have an association annual fees. The fees also depends on what facilities are offered in the community. For example a golf community will have much more association dues than a community with just a pool.
9. Mineral rights – Found oil below the land you purchased? Minerals impact value of land, but ownership of land does not entitle with mineral rights. On the other hand presence of mineral rocks can make installation of septic systems or laying the foundations tough. Ignoring doing a percolation test may be costly later