Unless you want to be a part of a comedy, such as “The Money Pit” (a movie from 1986 starring Tom Hanks), you want to do your homework before you buy a home. Buying a vacant lot comes with similar rules. Just because it’s just a piece of land, doesn’t mean you don’t have homework to do before you buy.
It’s important to know what you’re getting into when purchasing a vacant lot. There are many reasons to buy land and many reasons to avoid certain lots. With a vacant lot, you have the option to build a custom home or do whatever you’d like with the land.
While there are plenty of reasons to buy a vacant lot, you may run into specific issues compared to buying a house. Some lots may come with restrictions, which could make a difference for the deal. Here are seven things to be aware of before you buy a vacant lot.
Location, Location, Location
Just like any other real estate transaction, location makes a huge difference. When buying a vacant lot, you may prefer a specific type of location over another. Maybe you want to be out away from the city or maybe you prefer to be near the lake or close to where you work.
Not only will the location make a difference for you, if you plan to build a home on the lot, but it will also make a difference in the resale value.
Finding land zoned for your purposes is very important. You want to make sure you know the zoning laws and know what to expect. The last thing you want is for a huge big box store to end up in your backyard due to zoning restrictions.
Of course, zoning laws may prohibit you from building the home you want to build, as well. Make sure you’re allowed to build on the vacant lot you choose and make sure the home will be exactly what you want.
Does the lot already have utility access? If it doesn’t, is it possible to get utility access for electric, power, phone, internet, water and sewer? You really cannot have a home on the property, if you cannot get access to the necessary utilities; unless you prefer candlelight and an outhouse.
Purchasing a vacant lot with utilities already installed is the best way to go. You won’t have to pay for the installation separately and you won’t have anything to worry about.
Access to Roads
This may seem like a silly thing to worry about, but it’s more complex than you might realize. When you purchase a vacant lot, if it doesn’t already have road access, it can be a big deal to get road access.
Land without access to a major road may not provide access to city water or sewage. You may need a septic system and a well for your water, which could add to the overall construction costs.
However, if you’re looking for privacy, you may prefer to be cut off from major roads. If your dream is to live at the end of a dirt road, just know you will probably need to pay to have a septic system put in, along with a well for water. In addition, it could be difficult to get to the main roads during heavy snowfall or other extreme weather conditions.
While flooding isn’t an issue in every part of Alaska, it can be an issue if you’re near a river or another body of water. The last thing you want to do is buy a vacant lot, build a home and find out a year later, flooding is a huge issue for the property.
Checking the plats is one of the best ways to find out if the lot is found in a floodplain. It’s also important to hire a surveyor, if necessary. You can also check the zone to find out if the property is found in a flood zone.
If you want to build, you cannot do so without a permit or many permits, really. Anything you want to build will require a permit, from adding a deck to a home or building a new home from scratch.
This means, you may have to deal with government zoning before you can even start building a home on the lot. Before you purchase any vacant lot, make sure you can get the permits. You can check with the builder you plan to use or even an experienced real estate agent to make sure you will be able to get the permits when the time comes.
Understand the Costs
If you plan to buy a vacant lot and build a home, make sure you understand the costs before making the purchase. You don’t want to buy the wrong lot only to find out you’ll have to go above your budget to finish the project. Make sure you know what the costs involved will be for the lot, the taxes, construction, adding utilities and any other expenses involved.
Buying a vacant lot is a very exciting time, especially if you plan to build your dream home on the land. However, you need to do your homework before you make the purchase. Along with the above seven things, you should also make sure you’ll have the type of view you prefer and the type of home you want to build will be possible on the lot.