Whether you’re purchasing it for your own enjoyment or as an investment opportunity, buying land can be a great decision — and, potentially, an overwhelming one too. There’s a lot to consider when it comes to picking out the perfect property, and experience in the housing market doesn’t always directly translate into land real estate, which has its own set of rules, trends, and best practices.
Of course, you should never let a bit of unknown scare you off from making what could end up being a truly fantastic investment. And to help guide the way, we’re sharing our top tips for what all first-time land buyers should know, including how to tell if a piece of land is worth your money (and how to tell when it’s not).
Tip #1: Always work with a real estate agent
You don’t technically need a real estate agent in order to purchase land, but it’s definitely recommended, especially for first-time buyers.
Nobody knows the local land market better than an experienced agent who’s been helping buyers and sellers navigate it for years. A real estate agent is also crucial when it comes to negotiating your best price, and some sellers might only want to work with potential buyers who have an agent by their side.
Tip #2: Know what you have to spend
Land loans operate a bit differently than mortgage loans, and they’re considered to be a bit riskier too. With that in mind, you’ll want to be sure to figure out your financing prior to starting your search, including how much you’ll be able to borrow and how much cash you’re going to have to invest. Both of these are key to knowing what your total budget is so that you can optimize your search and stick to properties that make the most sense for you.
Tip #3: Figure out your must-haves and must-have-nots
What is an absolute essential for you when you think about the land you want to buy? Alternatively, what might be a dealbreaker? Determining these factors early on will save you a lot of time in the long run, and it will also help your agent pick out the best properties for you to see.
Keep in mind that this may require a bit of research, since as a first-time buyer there may be some things you don’t know yet about what features the type of land you’re interested in needs to include.
Tip #4: Check out zoning and building regulations
A raw piece of land presents a ton of opportunities — but they’re not endless. There are almost always going to be some limitations on what you can do and build on a piece of land based on local zoning and building regulations. And if you don’t check in to these before putting down and offer, you may end up committing to a property that doesn’t actually suit your needs.
To get the details, contact the Building and Planning Department that oversees the property. They’ll be able to fill you in on any and all restrictions you need to be aware of.
Tip #5: Take your time
Buying land is a big investment, so don’t rush it. The land market often moves at a bit of a slower pace than the housing market, so you should have the flexibility to really take your time and make a decision that’s right for you, your finances, and your future.
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