Land can make a great investment. The opportunities that vacant land presents are numerous – you can develop it into farmland, a recreational facility, or a private preserve. You can also build an investment property on it or your very own home. Even without a structure, land can be a highly profitable investment. As a limited resource, land increases in value as the area develops and the demand for real estate increases.
In Stevens County, MN, you’ll find a wealth of vacant land with tremendous investment potentials. Buying land, however, has its own nuances that you need to understand in order to avoid costly mistakes.
To help you get started, here are 10 things you must do before buying vacant land.
- Check the soil
In buying vacant land, one of the first things you need to do is a soil percolation test. Essentially, this test determines how quickly the soil drains liquid. This can impact a number of things – from the type of foundations you should use to whether or not you can have a septic tank.
- Assess the location relative to your purpose
Location can make it easier or more difficult to achieve your intended use for the land. Think about your endgame and determine what locations suit it best. If you plan to sell it to developers or to build a residential property for rent, choose land where growth is forecasted in the next decade or so. If you’re thinking of using it as farmland, look at the lay of the land and the suitability of the soil for planting crops or pasture. If you want to build your home on it, consider access to important places, such as schools, offices, grocery stores, and so on.
Similarly, distance from the nearest roads will not only impact your travel but also how quickly emergency services can get to the property should they be needed.
- Look into your financing options
Many lenders won’t back a loan for vacant land because there’s no structure that can serve as collateral. However, it’s entirely possible to get the mortgage you need if you have a great credit score or a good relationship with your bank. You can look into other options, as well, such as seller financing, which is quite common in land sales. The easiest and most widely used option is paying in cash.
- Look at the infrastructure
In many cases, you won’t have the luxury of installed utilities. If you don’t plan to make any improvements on the land, this may not be a concern. If you plan to build a home or business, however, you’ll need to look into the cost of connecting the property to power lines, water supply, and so on.
- Know the codes, ordinances, and zones before you buy
Your dream for the land may run afoul of regulations set by the city or town Many first-time buyers make the mistake of assuming they can have these issues changed in their favor without much trouble. It’s possible to have your land rezoned, but the restrictions that are in place were established for good reason, so rezoning may not be as easy as you might think. Know the restrictions before making the purchase and see if they suit your purpose.
- Learn about covenants
If you’re looking to build on land that’s part of a subdivision, find out if the neighborhood is covered by covenants. Covenants are rules specific to the neighborhood, regulating details like the type and architecture you can build, setbacks, parking spaces, and so on. They can also restrict the amount of money you can spend on new construction so that your property’s value won’t greatly exceed the average value of homes in the neighborhood.
- Consider easements
Simply put, easements are claims neighbors put out of necessity on the adjacent land. They can be legally recognized or agreed to privately. In either case, you’ll want to know if the owner of the property next to yours has legal use over part of your land. Similarly, you might need an easement on the adjoining property to facilitate the use of your property, such as to run a power line or to gain access to your land if there’s no public road leading to it.
- Get to know the area
How people use the areas surrounding your property may create disruption or distraction. Public-access lakes or woods, for example, can generate plenty of noise or foot traffic if they’re popular picnic or recreation spots. Knowing these things before you buy will save you from unpleasant surprises down the road.
- Build good neighbor relations
When you set out to move or do business in a new area, start off on the right foot by getting to know your neighbors. They can even give you tips or little-known details about the property you’re interested in. Being neighborly can also prevent conflicts down the road. For example, there have been many instances of neighbors complaining about the farming operations next door – disputes and conflicts that can easily be resolved or avoided by building a trusting relationship.
- Have the land surveyed
Surveying is an important step in buying land. A land survey will define and validate the boundary lines of the property you’re interested in and the structures and improvements made within those boundaries. The survey will also verify all related features, such as the fencing and street. It will also allow you to see if a neighbor is encroaching on the property.
Even with an existing survey, it’s best to have a new one done before you purchase a piece of land to ensure all featured details are current and accurate.
Are you thinking of investing in vacant land in Morris, Hancock, Donnelly, or their neighboring communities? We at Riley Realty, LLC can provide you with the expert guidance you need. Call us at 320.589.2159 or get in touch with us here.