Thinking about investing in raw land? It's a smart place to put your money-- but only if you know what you're doing. Today, we're going to be listing some of the ways you can become a smart land buyer and get maximum return on your investment.
We have decades of raw land experience and own properties in Hawaii, California, Florida, Colorado, Wyoming, Texas and Nevada.
Can you build?
First, you should make sure that the land you wish to purchase is appropriately zoned. The local planning authorities will be able to tell you what kind of buildings may be constructed and what the land would typically be used for. You will also want to examine the topography of the land to determine if natural barriers (cliffs, ravines, etc.) prevent development of the land.
Next, you will want to determine if the property has any usage restrictions (especially important if it falls under the authority of a Homeowners Association) and whether or not utilities like gas, telephone or electricity are available in the area. Finally, you will need to learn how much of a setback is required and whether your land will be rendered too small to be useful.
Does the land have access to water? Will you need to dig a well? You'll need to get price estimates if it turns out that you need a well or trucked-in water.
Other water concerns: Is the property in a flood zone? (FEMA flood maps should reveal this information.) And how is the drainage? Does the soil percolate? Is there a sewer system nearby?
What is the shape of the lot? Is it an awkward size that will be difficult to develop? What do the nearby properties look like? Are they rundown or ramshackle? Is the land being used to dump old tires and other junk? Have you ordered an environmental report from the proper authorities? It will tell you about past contamination of the property.
Finally, you will want to research your annual property tax obligation and whether it is prohibitive.