By Laura Mueller
There’s a lot that can be said for the benefits of investing in land. Like all investments, however, there is a cost factor to consider along with potential benefits. And when it comes to cheap land, you’ll want to be sure you’re doing your due diligence so that you don’t end up wasting money on what only seems to be a total steal.
Here’s what to know about cheap land, including what to look out for when you’re deciding whether a low-cost property is worth investing in.
Possible perils of cheap land
Some cheap land is priced low because of location. The price per acre in Arkansas, Tennessee, and West Virginia, for example tends to be the lowest in the nation, primarily due to supply and demand. But if you find cheap land being advertised in an area where the comps don’t support the listing price, it could be a sign that there’s something else going on.
Possible reasons why land might be listed uncharacteristically cheap include:
• It requires a big additional investment in order to be usable, such as needing to bring in costly utilities or access points
• It has setbacks, easements, building restrictions, and/or zoning regulations that severely limit how much of the land can go toward functional use
• It is located in a flood or fire zone (and has potentially seen damage in the past)
• The soil is unsuitable for building or agriculture
Fortunately, by doing your homework you should be able to identify any of these possible perils before you close the deal.
Quick tips for buying cheap land
Cheap land can be a worthwhile investment, but as with any land purchase, you’ll want to know exactly what you’re getting into. Follow these tips to ensure that you don’t get duped.
1. Work with an experienced local real estate agent. They’ll have the know-how to help you see through a too-good-to-be-true listing.
2. Find out what utilities are already provided for. Bringing in water, electricity, and a septic tank or sewer connection are all hugely expensive. And if you’re interested in cheap land for building on and it requires utility set-up, you’ll face a big bill before you even get the foundation down.
3. Check on road access points. Does the property have an access road? If not, you’ll end up spending a lot on excavation and laying one down.
4. Get the soil checked out. Soil testing will tell you what kind of soil is present on the property and whether it’s the right kind for what you plan to use the land for.
5. Gather relevant info from the town’s Building & Planning Department. This is the place to go to get information on any potential natural risks, zoning regulations, easements, or other restrictions—any of which can turn a seemingly good deal into a dud.
No investments are guaranteed to work out, regardless of how much you spend. But by being aware of the risks of cheap land and looking into all possible issues before committing, you can gain more confidence in your decision—and hopefully purchase land that’s ultimately worth what you paid for it, if not more.
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