It can be very tempting to buy land and build your own house rather than buy a property that is ready to go. This is for several reasons. First, you don’t want to wind up with a house you don’t like. When you build your own house you know you will enjoy the layout of the structure for years to come. In short, you get your dream home. Second, you can sometimes buy land and build on it cheaper than you can purchase a property with a house already on it.
Whatever your reasons for looking into buying land, there are some important things you need to consider before you take the leap. Some of these things are in relation to building on the land, and some are relative to the land itself. All of these things should be carefully considered before you purchase a plot of land.
1. How much will it cost to run utilities to the land? If the land does not already have utilities running to it, you need to consider this cost in the cost of building on the land. This type of work can really add up, and can cost thousands of dollars. It is important to consider this potential cost when deciding if it is more cost effective to buy land or a real estate property.
2. Is the land zoned property for your use? If you want to build your dream home you will need to make sure the land is zoned for residential use. If you have a home based business or want to start one in the future, you also should make sure that the land is double zoned for residential and commercial use. This way all of your bases are covered.
3. Is the land free for purchase? Make sure that the land is not part of a development project, as this can come with many hassles and restrictions when it comes time to build on the land. You should also make sure that there are no taxes owed or leins on the property, just as you would with any real estate transaction.
4. Is the land in a convenient location? Often times land for sale is outside the city limits or in the suburbs. You will want to make sure that it is convenient for you in terms of work and facilities, such as the grocery store. Carefully weigh the options of living in the city versus the countryside, and make sure you are willing to make those sacrifices before spending the money on the land.
5. Can you get the financial backing you need to build the house? Buying land is often cheap, and can typically be done using savings without any mortgage necessary. However, building a home on the land is a different story. Make sure you can get a construction mortgage before you buy the land. Qualifying for such a mortgage can often be more restrictive than a typical home loan, so you need to get pre-qualified and get that ball rolling before you buy land.