Buying Vacant Land? Here’s What You Need To Know!
Purchasing a vacant land lot represents an exciting opportunity to custom-build your own dream home to suit your taste and specific needs. You may opt to develop the land for an investment property or start a new business venture the possibilities are endless.
However, just like with purchasing any other piece of real estate, buying vacant land is a complex process that may result in difficulties rearing their head later down the road. For a first-time buyer of vacant land, some of the restrictions and building requirements may come as a nasty surprise.
Vicki Philipoff Settlements has put together a summary of things you ought to consider before rushing into purchasing that lot of vacant land that you have kept your eye out for.
Intrinsic Land Features & Attributes
When purchasing land, there’s a wide variety of factors that ought to be considered such as the historical background of the land and understanding the reasoning why the existing owner is willing to part ways with the land in the first place.
One of the most important attributes to consider is the size, shape and slope of the land. Depending on your needs, some shapes may be preferable to others. For conventional homes, a square or rectangular and largely flat plot may be more desirable. Land that is sloped and elevated may be more attractive when building to take advantage of gorgeous beachfront or mountain views.
Depending on where the land is, you may find that plots of vacant land exist in existing or newly developed residential areas, where water, electricity and other utilities have already been connected and are already functional. Some may even be prepared for NBN or optic fibre for the internet.
In other instances, particularly in rural or undeveloped areas, the land may not have access to clearways or roads.
External Factors Affecting the Land
A common saying in Real Estate is “Location, Location, Location”. In some instances, the location of the land is a more important consideration than the dimensional layout of the land. Especially if the land exists close to a popular shopping centre, entertainment facilities, school zones or public transport station.
Understanding the value of existing and prospective infrastructure and amenities that are external to the land will significantly impact the long-term appreciation and potential income return of the land and the properties built on it.
There are also government legislation and council-specific zoning regulations that may impact what you can build and how you can make use of the land. For instance, there may be tighter restrictions on constructing higher-density housing in suburban areas, meanwhile, in rural areas, it may be permissible to raise farm animals such as sheep or cows.
Zoning regulations are a characteristic of the land that is often unconsidered but is deeply critical as it dictates what can or can’t be accomplished with it. Bear in mind that zoning statuses are not fixed and are liable to change
Obtaining The Land & Future Plans
When purchasing land, it’s essential to consider your options of payment and your financial positioning. Can you pay for it in a cash lump sum, or do you need to arrange financing? Can you afford to finance the land if you are unable to make an immediate return on your investment?
In some circumstances, a vacant lot of land might appreciate at a much slower rate than developed property. If you cannot bear the expense of loan repayments while incurring construction costs it may not be worth the potential earnings in this investment. Not to mention all other costs that are associated with owning vacant land such as land and building surveyor costs. Pending the results of a survey, you may soon learn that your land is in an area prone to flooding which can drastically affect the value of the land and how you construct on it.
Knowing the nature of the land is critical to future development, you may want to consider what the physical makeup of the land consists of, i.e. soil, sand or rock-based. This will severely impact the types of homes or buildings you wish to construct, for instance, you may be able to develop a house with a concrete slab on soil-based land, but may find it challenging to do the same on sand-based land without incurring additional construction costs.
Purchasing Vacant Land
Before committing to a purchase of vacant land it’s important that you carefully consider all the abovementioned factors, weigh up the pros and cons of the land in question you wish to buy and above all else speak to property specialists such as real estate agents, property settlement and conveyancing specialists who have specialised knowledge.
Vicki Philipoff Settlements is Perth’s leading conveyancing and settlement agency and has conducted thousands of settlements for over 23 years. Our team is qualified and is completely up-to-date with the latest developments in legislation, trends and insurance for vacant land transactions.
If you’re interested in Vicki Philipoff Settlements conveyancing and settlement services, get in touch with us today or apply for a free quote and settle with ease.
