What to consider before buying land

Buying land

If you are planning on investing into land and making a profit out of developing and reselling it, it can be a great opportunity. But just like with any other kind of business, there are certain risk factors involved. There are things to consider when purchasing land for development that could help you lower the risks and make a faster turnover. We hope the following guidelines will guide you in the right direction to help you achieve that.

 

Plan

Don’t just rush into buying land because you found a cheap deal. Think about why you want to buy land instead of an existing property. If your plan is to build something in order to sell it, the most important thing to think about is its purpose. Planning the development accordingly is important for turning your project into a sold property. Or enjoying its full possibilities if you’re buying in order to build your home.

 

Budget

After you’ve come up with what you want to build, set your budget. You will probably go beyond it, but you need to have a certain spectrum or limit and your goal is to stay within that. Especially if you want to sell it further. You want to make an optimal profit, which means staying within the target limit is very important.

 

Development

It is important to do research about a plot of interest. Is there a possibility of any issues? What kind of utility options are available? Will your building plan disturb anyone or could it set off problems? Depending on the location, you might want to check if there are any possibilities of archeological findings. You don’t want to start digging only to discover a historical site which will set you back in time for months due to research.

Make estimates of how well the land in question is (un)prepared for future development. Your final cost of building will depend on this as well. Do the numbers to see if it costs you more to prepare the land and build from scratch or buy a developed property.

 

Location

The location is the most important term in real estate. Everything depends on it. Time of selling, who your buyers are and what (if anything at all) you can do with a certain piece of land in the first place.

If there are plans for big industrial objects to be built in the next 5, 10 years, and your plan is to build a family house, then you might re-consider buying a plot there.

 

Future

Have a look at the area and if possible, consult local authorities in regards to future development plans. You definitively want to know what is happening in the area long term. You don’t want to buy land, build a family house on it, only to find out that shops are closing down and the only school in the area has to relocate due to lack of children in the area.

Even if your plan is to simply sell whatever you build, you’ll want to know future plans in order to effectively sell with profit.