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Many people get into investing in land because it used to be the old American fall back plan. Land historically only increases in value for the owner over time and often yields a good return. The idea behind this is that land is perpetual and forever while a property begins to devalue on day one just like when you drive a car off the lot or buying a diamond ring. If you are savvy and patient there are still great deals on land to be had and to and to be held on to. Follow our how to buy guide for the basic intel on buying that little piece of heaven you have you eye on.
There is a reason the old adage says location, location, location. Location is literally everything in land investing. Obviously land near desirable areas beachfront and oceans, mountains, near a popular city or other draws tend to inflate the price of a tract of land. There is a reason why Maine has some of the most expensive land for investment. It is because it is breathtakingly beautiful there and people will pay a premium for it. This should be you chief consideration when planning to invest. Get the where sorted out and the rest of the questions are progressively easier..
It is a perfectly reasonable question and knowing the answer will guide your way. Do you plan to just sit on the undeveloped land until someone comes along with an offer? Do you want to build a residential property? Do you want to live there yourself? Is it suitable for farming, mixed-use or industrial? Each of these questions also comes with a choice to be made and considerations to be thought about. A piece of land can look amazing, but may not have suitable sewage and power utilities to make it a viable living area.
Hopefully you are careful and too smart to buy a disaster waiting to happen. However, ever purchase of land comes with environmental concerns that need addressing. Whether you suspect an issue or not it is always a good idea to investigate not just the property your are buying, but also the history of the area surrounding it. There are many fine assessment companies that can be contracted just for this task. The Environmental Protection Agency has a terrific website full of resources at www.epa.gov.
Once you know what you would like to do with a parcel of land, you had better make sure that area is zoned for what you are looking for. If not attempting to overcome zoning restrictions can turn in to a nightmare and render your grand scheme useless. Most cities have either a main City Planning office, Zoning Department or Redevelopment Division that determines those rules and the process of permits and fees.
If there is a chance you are buying land with the idea of being a long term holder with no development planned, taxes will be your highest carrying cost. You need to account for taxes if you are not using the land in a useful manner to make an income right away. Any city or county assessor's office will have the details on the expectation of taxes and what exemtions, history and if discounts are available.
Although this falls under several of these categories it is important not to over look restrictions on a parcel of land. Many times rules and restrictions were put into place long before you had your eye on this location. Depending on what you have in mind, you may not be able to do much with it. Common restrictions are on types of building allowed to be build, height, domicile considerations, farming capability, matierials allowed and other possible cosmetic requirements.
Many times Homeowners Associations have been the band of the new property ower. They often hold sway and influence over what types of developing is allowed and you may run up against a powerful ally or foe depending on the situation. Investigate this carefully before investing and decide whether the local HA will be an asset or an enemy to your plans.
There are lots of great deals out there including tracts of land on huge slopes, impossible to clear rocky wastes and of course the legendary swamp deals like those in Florida. Like any other type of investment the buyer should always beware. There are plenty of people out there who made mistakes buying bad land cheaply and they can't wait to dump it off on you if you are too eager and unwise to listen. Any deal that sounds too good to be true, likely is.