by Laura Mueller
It’s always important to ask the right questions when you’re buying a piece of real estate, and that’s as true for land as it is for anything else.
More information is always a good thing, especially when it comes to a big investment like a land purchase. And while your agent will be able to guide you through a lot of the ins-and-outs of what you’ll need to know, it never hurts to be as informed as possible regarding the various factors that will help you determine if a property is worth your time (and your money) or not.
With that in mind, here are eleven essential questions to ask when buying land—including some that might not be very obvious.
1. How is the property zoned? You’ll want to be well aware of what you can and can’t do on the property, especially if it’s raw or otherwise undeveloped land.
2. Are there any building restrictions? Similar to above, this tells you whether you’ll be restricted in what you can do on the land, particularly in terms of structural improvements.
3. What are the access rights? Make sure you know whether there’s an existing access road, as well as whether it’s publicly maintained and if anybody else has rights to it.
4. Are there any utilities and/or utility hook-ups? Figure out exactly what’s already available in terms of water, electricity, sewage, and other key utility systems—or if you’ll need to pay to put them in.
5. Are there any planned developments surrounding or near to the property? Find out in advance if there are any nearby updates that will affect your land use, your views, or your privacy.
6. Who are the neighbors? If possible, find out who owns the properties adjoining the piece of land and, most importantly, whether there are any ongoing issues with them over things like boundary lines or access rights.
7. Are there any easements on the land? You’ll want to know sooner rather than later if you’re going to have to share a portion of the land with neighbors, the public, a conservation group, or anyone else.
8. How much are the property taxes? Even vacant land is subject to property taxes. Get an estimate in advance of what the annual taxes are so that you can double check they fit in your budget.
9. Are there any tax exemptions on the land? Speaking of taxes, you should also ask about any possible tax exemptions, such as those for making certain agricultural or energy improvements on the land.
10. Is the seller offering financing? Land mortgages aren’t always as clear-cut as conventional real estate mortgages, and some sellers opt to provide their own financing instead in order to ensure a smoother deal. Ask if that’s the case, or if there are any other sort of seller finance expectations or concessions.
11. Is the title free and clear? A title check will tell you if the seller has the necessary title rights, but you can also ask in advance to save yourself some time later on.
Asking the right questions when you’re buying land isn’t just about convenience. While sellers do have mandatory disclosures that they have to make, knowing what questions to ask gives you more agency to advocate for yourself—and it’s also integral to protecting your rights and your resources as a land buyer.
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by Laura Mueller
The heat of summer is on its way, and with it, some special concerns that you’ll want to be aware of as you maintain (or improve) your vacant land.
Owning a vacant plot doesn’t usually require much work on your end, however it’s still important that you take proper steps to keep it in the best condition possible—especially if you’re planning to eventually develop or sell the property. With that in mind, here are some quick tips on how to care for your vacant land during the summer season.
Do some general landscaping
You don’t need to do a complete land improvement, but you should undertake some basic landscaping tasks to ensure that your land doesn’t get out of control during the warm months, and that it’s less prone to wildfires. This may include trimming your trees and bushes back, mowing the grass, and possibly doing some strategic planting—especially if you’re concerned about boundary lines or potential trespassers.
Take on those weeds
Speaking of landscaping to-dos, practicing routine, preventative weed control each summer is a whole lot easier than dealing with a major weed issue later on. Mowing and cutting will go a long way toward keeping weeds at bay, as will establishing competitive vegetation that slows down or prohibits the growth of weeds in the first place. If you opt for a chemical control method such as herbicides, just be sure to choose a product that won’t harm the surrounding plant life.
Keep pests under control
Vacant land isn’t actually so vacant when you consider how many pests are calling it home. Most bugs and rodents are perfectly safe to have on your land—and many are even quite beneficial—however you’ll want to be aware if your property is experiencing excessive rates of not-so-great pests like mosquitos or wood-boring insects. Bring in a professional if you’re worried, since they’ll be able to source out any pest problems and direct you on your best next steps.
Check for water issues
Summer means rain, and rain could mean serious property damage if you’re not paying attention. Keep an eye out for lingering drainage issues, such as large areas of standing water. Depending on the circumstances, these can lead to soil contamination, or they may speak to other, more extensive issues that you’ll need to take care of.
If you’re planning on making improvements to your vacant land, then summer is a great time to do it. Add in access roads or utility lines, do some of that aforementioned landscaping, and get to work on building any structure(s) that you have in mind. You don’t need to cram everything in to one summer, but the warmer months are certainly worth taking advantage of since you won’t have to be concerned about frozen ground or heavy snowfalls causing delays in your plans.
Just as summer is a great time to improve your vacant land, it’s also a great time to make a vacant land purchase. If you’re thinking of entering the land market or expanding your current portfolio, there’s a good amount of inventory currently available—plus much better weather for touring, surveying, and making sure you get exactly what you’re looking for.
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by Laura Mueller
Property taxes apply to all land investments, regardless of whether you’re living on the land, building on it, or making an income off of it. That means that if you own vacant land, you’re going to have to pay property taxes on it—though you may also be eligible for some pretty decent deductions.
Here’s what to know about property taxes on vacant land, plus a quick look at what types of deductions you might be eligible for.
How property taxes are calculated on vacant land
The amount of property taxes that you owe on vacant land are calculated by your county tax assessor and are usually based on the “best and highest use” potential of the plot—i.e. its most profitable use. Even so, you can expect that the amount you’ll owe for vacant land is much less than the amount you’d owe for improved land.
Depending on where you live, you may have state specific rules that govern property taxes on vacant land and how much they can increase year after year. In California, for example, Proposition 13 dictates that the assessed value of your vacant land cannot go up by more than 2% in any given year, regardless of other changes that may have impacted its use and profit potential.
What if you disagree with the assessed value of your land?
It’s not uncommon for land owners to find themselves facing higher property taxes than they anticipated. As a good rule of thumb, it’s always a good idea to look at the property tax history of a plot of land prior to purchasing it so that you can get a heads up on what you’re in for. But if you buy vacant land and think the assessed value is too high—or if you think it’s gone up too much in the past year—then you do have some potential recourse.
To appeal your property tax assessment, start by digging into the data. Pull up your property’s record card and look for discrepancies in the description of your land, since if they exist you should have no trouble getting a fast adjustment. If that doesn’t work, look to the comps and your land itself to make a case for why the assessed value is too high. You can then take this information to your county, where you’ll go through a formal appeal process.
Note that you’ll likely face limitations on when you can appeal your vacant land property taxes. For instance, expect that you won’t be able to place an appeal until a new assessment comes out after purchasing, and that from there you may have between 30 and 90 days to launch your case.
Vacant land tax deductions
On the bright side, as a land investor you are eligible to write off certain expenses related to owning your vacant property, and that includes your property taxes. You can also write off the interest that you pay on your land loan. Both of these expenses will go on your Schedule A tax form, which covers personal itemized deductions.
Keep in mind that under the Tax Cuts and Jobs Act (TCJA), certain deductions that used to be standard for investors of vacant land—think improvements, maintenance fees, and legal and accounting fees—are no longer viable write-offs unless you are a land dealer purchasing property for a quick turnaround sale.
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By Caroline Kirby
Over the last year, you may have seen articles, interviews, reports, and even friends talking about swapping the city for rural areas. Whether that’s because their jobs are now allowing for more flexibility and the option to work remotely or they simply want to get out of the crowded cities, there are plenty of obvious reasons why heading out of town and into the country is a good idea.
However, pandemic or not, there are tons of benefits to moving to a rural area or at the very least investing in rural property. Curious if this is the right move for you? Here’s a quick look at some of the top benefits of buying rural property.
Should you invest in rural property?
Smaller populations, more space, slower pace of living, and greater accessibility to nature are some of the most common reasons people cite for looking for rural land. Here are some of the benefits you may not have considered:
1. Greater flexibility for developing: When you compare property development restrictions found in big cities, it’s a no-brainer that you have more flexibility to develop in rural areas. This means you could list your property without the headache of strict listing regulations, or you have more options when it comes to extending land.
2. Cheaper price points: Although admittedly, the COVID-19 pandemic may have led to a spark in the purchasing of rural properties, it certainly won’t cost you near as much as urban properties. This could allow you to even be able to purchase multiple properties.
3. More bang for your buck: It likely goes without saying, but the acreage you can purchase in rural areas is well over anything you’ll find in a more populated community. Your investment money can go a long way with rural properties.
Investing in rural property requires special considerations.
While there are many advantages to investing in a rural property, if it’s your first time buying land out of the city, you should be aware of some critical factors. While it’s nothing to be worried about, there are some characteristics of rural properties that may influence your decision.
• Pay special attention to the area’s economy. Depending on what you’re purchasing your rural property for, you will want to do your research on what the local economy is like. Is the area only supported by one industry? If so, that may be a risky investment.
• Get familiar with local pests and diseases. If you are hoping to purchase rural property to raise livestock or build a farm, you will definitely need to be aware of what the disease and pest management situation is in the area.
• Get a feel for the surrounding community. Again, depending on what you hope to do with your property, you may want to take some time to do your research on the local community. While some rural areas have strong and active community centers, events, and a sense of sharing, other areas are more reserved and may feel “sleepy” compared to what you’re used to.
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by Laura Mueller
Trespassing is a common worry among landowners, especially those with lots of acres or who aren’t living on their property full-time.
In many cases, trespassing may not be a big deal—or even a purposeful act on the part of the trespasser—but it’s still normal to want to take any action you can to prevent it from happening. Here’s what to know about trespassing, including some ways that you might be able to keep it from occurring in the first place.
What is trespassing?
In legal terms, “trespass to land” refers to when an individual or an object belonging to an individual enters your property without permission or a lawful reason to do so. It can be as simple as your neighbor accidentally crossing the boundaries into your property or allowing a physical item—such as a soccer ball—into your property. It can also be more serious, such as an unknown trespasser who not only enters onto your property but causes purposeful damage to it.
You do have legal recourse for trespassing so long as you can prove entry and intent (and in some states, direct damages). However, not all forms of trespassing warrant a legal response, and in almost all cases, it’s much easier to take step to prevent trespassing instead of dealing with it later on.
Tips for keeping trespassers out
If you’re worried about trespassers, then there are some things that you can do to hopefully keep them from coming on to your property. While there are no guarantees, these steps should reduce the likelihood of a trespass occurring, and if it does, can be helpful for proving intent later on.
1. Put up signs
One of the simplest things that you can do is to put up “No Trespassing” signs around the border of your land. Not only does this provide any potential trespassers with the knowledge that the land is privately owned and not to be accessed, it also helps establish where your borders start and end, which can help prevent accidental trespassing too.
2. Set up cameras at access points
Technology has made it easier than ever to monitor your land, even when you’re not physically present. Consider investing in motion-triggered outdoor cameras that will notify you if anyone is at an access point—or worse, crossing through.
3. Establish rapport with your neighbors
It’s always a good idea to get to know your neighbors, but if you need an extra reason to do so, consider that establishing a relationship with them means having another set of eyes for monitoring your property. It also makes it much more likely that if they need to step foot on your land for any reason, they’ll contact you about it directly instead of just coming over the boundary lines.
4. Add barriers
Like “No Trespassing” signs, fences, plant borders, and other types of screens all serve as physical guides for where your land begins and ends. They can also serve as effective barriers to trespassers. If you’re going the natural route, just make sure to opt for perennials instead of annuals so that you’re not tasked with redoing your barriers year after year.
If trespassing does happen, take action by calling your local police station and filing a report. Depending on the situation, you may want to avoid apprehending the trespasser(s) yourself, particularly if you do not know them personally.
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by Laura Mueller
There’s a lot of investment potential in buying and owning land—including some income opportunities that you might not have even thought of yet.
Most people buy land with very specific use intentions in mind. But whether you’ve purchased land for recreation, farming, or just to live on, there may be a way for you turn to turn existing parts of your property into active or passive income streams. And in addition to putting more money into your pockets now, this can also increase the overall value of your land if you go to sell later on.
Here are some cash opportunities that are worth making note of if you’re planning on buying land or already own some land that you’d like to make more money off of.
1. Offer an on-site vacation rental
There’s a big market for vacation rentals, and a lot of interest in secluded and private getaways. So if you have a structure on your land that can be currently used or renovated for this purpose, consider getting into the game. Sites like Airbnb and VRBO take a lot of the guesswork out of hosting and managing your own vacation rentals, and make it so that you don’t even have to be on site in order to let guests in and collect payment.
2. Set up some camping sites
Even without a rental-worthy property on your land you can still make passive income by arranging some camp sites. Bonus if you can promote other recreational activities for those who choose to stay, such as bird watching, hiking trails, or catch-and-release fishing—all without the crowds of traditional camp sites.
3. Host barn events
Don’t put an on-site barn to waste. While there’s certainly more that goes into it than just hanging up some string lights and calling it a day, barns make an excellent and attractive venue for weddings, corporate retreats, and other events, and many people are willing to pay a pretty penny for such a stunning space. This income stream isn’t quite so passive since you’ll need to coordinate with caterers, planners, and the like, but it is a great opportunity if you’re looking to expand your land’s use.
4. Lease agricultural plots
Do you have arable land that you’re not putting to any profitable use? Look into leasing out select portions to hobby farmers, community gardeners, or others who want to grow their own crops but don’t have the land to do it. You’ll get a rent payment every month, and as a bonus, you’ll have someone else working to beautify and maintain portions of your land.
5. Offer indoor and/or outdoor storage
If you’ve got the space and aren’t using it, why not rent it out to people who have stuff and nowhere to put it? Consider setting up indoor or outdoor storage spaces that you can rent at competitive rates. There’s a huge need for this, especially for large items like boats and RVs and for storage in rural areas where other facilities might not be so conveniently located.
Before pursuing any additional revenue stream, be sure to check the zoning and use requirements that pertain to your land. This way, you can be sure you’re in the clear and that you can make extra cash without running into any issues.
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