10 points to consider before buying acres of cheap land
Many urban dwellers dream of building a grand home in the countryside spread over a vast area. You too may have dreamt of owning such a house. For this, you have to buy a piece of cheap land that fits your budget. But it is not that easy to obtain a tract of low-priced land. Don’t be swayed by the real estate agents and the advertisements claiming to offer acres of cheap land. Look into the ground realities of the plot. Consider the points given below before buying any cheap land so that you don’t fall in trouble after the closing.
1. Purpose
Determine the purpose for which you are buying the land. A cheap land would generally not yield a significant result in the short run. So, treat it as a long-term investment. If you are buying the land for living purposes, choose the location accordingly. For agricultural purposes, check the irrigation, fertility and other related aspects of the area.
2. Budget
The first thing you need to do is to decide how much you can afford to put in for acquiring that cheap land. Buyers usually pay earnest money along with the offer as a part of the down payment. Also, you can’t leverage a land purchase with the bank in a similar manner to a home purchase. There is a greater probability that you have to pay the sum in cash if no structure has been built on the property yet. At maximum, you might get about 40% – 50% of the land value if you have good connections.
3. Location
A cheap land is usually available far off from the city and dense settlements. As you move further in the country, the acreage gets cheaper. But if you want to raise kids by building your dream home there, you need to search for a location that has good schools nearby. A good transportation network near a cheap land raises the chances of having a good return over time.
4. Zoning
Zoning is another important consideration while buying a plot of cheap land. You can know the zoning of the land in seconds by calling the local planning and zoning department. The land may fall into agricultural, residential, commercial or any other category. Ask about future zoning too. However, don’t get reliant only on what agents say about future changes in zonal plans. Make the investment in the cheap land according to the zoning at the time of buying.
5. Topography
The land may be selling cheap if it has uneven topography. It becomes crucial to have a close knowledge of the surface of the cheap land you are going to buy. Topography has a great influence on the build-ability of the property. Research to know if the land has cliffs, hilly surface or other features which may have a negative effect on the value of the property. You can take the help of Google Earth to have a survey of the area.
6. Access to road
It is important to ascertain that the land you are going to buy has a legal, transferable and permanent access specified in the deed. Don’t buy a piece of cheap land without inquiring about the details of access. A property on county or state road doesn’t come with a guaranteed access to the road. Therefore, only buy the land after making a proper investigation of access to a road from the property.
7. Public Utilities
Most people would buy land to build a house on it. However, the land value is lowered if adequate public utilities like water, sewer, drainage, electricity, gas, etc., are not available. Check the drainage characteristics of the area around the cheap land you are going to buy. Percolation test will give an idea about absorption capacity of the land. If there is no accessible sewer system, construction of septic tanks would become inevitable for living purposes. Factor its cost and drainage characteristics while buying the land. Also, know about the availability of power grid connectivity and electric connections near the land. However, you can install solar panels on the land for an eco-friendly power supply in an isolated location.
8. Tax obligation
If you think you are getting a great property at a cheap land price, then check for its tax obligations too. Some land parcels may have unexpectedly high taxation rate on them. Some properties may have annual tax bill of 10% to 15% or higher of what you pay for the ‘cheap land’. Such land would prove an economic burden on you. Therefore, try to find land with lower tax obligations.
9. Setbacks and view ordinances
Find the setback requirements for the land in the given area. Take the setbacks into the account and analyze whether enough space for useful construction remains after it. Tracts with long length but small breadth and vice-versa may have cheap land prices due to this fact. View ordinances in some localities may restrict from adding another story to the house on your land.
10. Reason for selling cheap land
Yeah, this is the basic question you should ask yourself. You might get lucky to get a plot at a cheap land price. But it is highly likely that the land is low-priced due to some issues related to it. Don’t just fall into the dream of property ownership. Do your homework on the plot. Check the title deed of the property. Research about the shape and size of the property, and about its previous usage and disputes, if any.
Please consider the above given points before putting your hard-earned money in any cheap land deal. Do a proper research of the facts related to the property so that you may get to know about any discrepancies which may trouble you after the closing.