Even though it may seem intimidating at first, purchasing raw land is not as scary of an investment as you might think. By familiarizing yourself with some important considerations when it comes to buying raw land and knowing how to do the proper research, you can open up a wide variety of investment opportunities. One of the most important things is surrounding yourself with resources and experts to learn more about a property. These are some initial points to look into when examining a plot of land:
1. Future Land Use
Check out the future land use plan in the areas surrounding the property and the city itself to get an idea of what the residents and government would like to see built. This will also give you a basic idea of what the area might look like in the years to come. Talk with the town planner to get insight.
Finding land that is within the path of growth can be a very profitable investment, especially for growing cities that are expanding their borders. Look for land near or along main roads heading into a city center, especially at intersections.
2. Check Utilities
Confirm the locations and available capacity of utilities like water and sewer. Find where they are located in relation to the property, as this can have a large impact on property value. Discuss the utilities on the property with the county or town’s utility department.
3. Zoning Laws
It’s important to understand a property’s current zoning and potential rezoning. Talk to the zoning department of the county about the plot’s current zoning and opportunities for rezoning, as this can determine the type of investment available to you. For example, an old single family home might be able to be demolished and rezoned for multifamily housing.
4. Survey the Land
Always review the seller’s most recent survey of the land to better understand the layout of the property. Additionally, you should have your own survey performed; you may uncover some red flags, challenges, or new opportunities. You can’t be certain who performed the previous survey so it’s best to have a neutral eye take another look. Be sure to hire a licensed professional land surveyor.
5. Be Creative
One key aspect of purchasing raw land is thinking outside of the box. There are a variety of income-producing opportunities on any given property. Consider some investment strategies you haven’t tried before, such as Section 8 housing, camping, farming, hunting, or timber, depending on the size and layout of the land. Or, buy some land and hold onto it as the surrounding area grows and develops. Above all, it’s important to look to the future when purchasing an undeveloped plot.