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5 Things to Look for When Buying Raw Land

5 things to look for when buying raw land

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Published date:

September 07, 2022

Last updated date:

September 07, 2022

By Manny Manriquez

Raw land can be a great investment. In order to make the most of it though, you want to be sure to do your due diligence when looking for properties to buy. This includes paying attention to all of the many factors that can impact whether or not a listing is worth its price tag – and whether it’s likely to offer you value in return.

So where should you start? Here are five things to look for when buying raw land, each of which will be key in deciding whether or not you’ve found the perfect property.

#1: Use potential

A piece of raw land may look like it has limitless potential, but that’s not always the case. Whatever your long-term plan is for your investment, check out current zoning and use restrictions to make sure that it’s something achievable. While rezoning is a possibility, it’s a tough road and not a guarantee.

Likewise, consider the costs associated with making the land usable. A well-priced property may not be such a good buy if you’re going to have to spend big to bring in utilities, access roads, and other must-haves related to your plans.

#2: Location

Location is a major factor in any real estate transaction, and that includes the purchasing of raw land. Again, consider how you want to use the land and if the location is ideal for that purpose. If your plans include residential or commercial development, is the area in high enough demand to support the investment? If you’re looking for seclusion, are nearby neighbors or roads going to interfere with privacy? You can change a lot of things about raw land but not its location, so questions like these should always be top of mind.

#3: Previous ownership

If possible, try to gather some information on the experiences of the property’s previous owners. Even something as simple as finding out why they’re selling can provide you with a ton of insight on whether or not the parcel is a good buy. It’s worth asking too about any challenges previous owners faced with the property, such as issues with flooding or soil quality.

#4: Permit requirements

Pretty much any improvement that you might want to make on raw land comes with a permit requirement. And it’s important to know what permits you’ll need to get, what the process for getting them is, and how much they’ll cost, as well as what permit restrictions and regulations there are.

Specific permits to look into include building permits, environmental permits, zoning permits, and sewer and water permits, all of which will need to be ironed out if you have projects you want to implement.

#5: Environmental concerns

Have environmental testing done so that you can identify whether there are concerns that may impede your plans. Polluted water or contaminated soil are both big problems with incredibly costly fixes (assuming they can be fixed at all), and they’re almost certainly going to impact your use. Because these assessments can take time, add an environmental contingency to your offer to protect your earnest money and let the seller know you’ll be undertaking the process.

Whether you’re new to buying raw land or a seasoned pro, always have an experienced real estate agent and attorney by your side. They’ll be able to guide you on the factors above and other key considerations for protecting your interests and making a good investment.

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