There are so many reasons why buying a property is a good idea for potential investors or even homeowners. First of all, there are so many options when it comes to all that you can do with this lot. Second, unlike in the field of real estate, the competition will not be as tough. Third, there’s no depreciation for the land that you own, which means that this can be an amazing long-term investment on your part. Speaking of which, even if you have no immediate plans for the property in question, expenses are a lot cheaper, which gives you more time and more maneuvering space for you to make a move. All in all, before you make a decision, you need to buy the property in question and here are several tips that you might find quite handy.
Consider your funding
In a scenario where you don’t have enough funds as it is, there are several loan options that you should consider for your land purchase idea. First of all, you can apply for a construction loan and use this money to both buy the land and finance construction. For this to work, you need to have a business plan, as well as establish whether you’re buying a finished lot or raw land. Also, don’t forget that you need the money for a down payment, which is somewhere around 10 to 20 per cent of the future value of the home that you intend to construct.
Buy before the trend
One of the first tips that you should receive when buying a property is to always, always buy before the trend. Once everyone starts buying property in a certain area, its value will skyrocket and you will find yourself in a scenario where you have to pay significantly more for the same lot. A trick that you can use in order to get ahead of the curve is by reading the review of the city’s planning commission for the future. Luckily for you, most commissions are making plans decades in the future, which means that by reading a plan for 2035, you can easily anticipate trend shifts long before the general public.
Tear-down property is an amazing opportunity
Run-down properties can sometimes be bought quite cheaply, due to the fact that the buyer will later have to either renovate or tear-down the place in order to make a new construction. Due to the fact that the majority of sellers recognize this potential expense, it’s sometimes even possible to get the property for less than the value of the land without the property. Just make sure to take the above-listed expenses (remodelling/demolishing) yourself, before deciding whether to make the purchase.
Ask for some legal assistance
Buying a property is just a means to an end, due to the fact that the end goal is to either construct a building on a property or sell it on a later date. For either of this to work, you need a lot of legal work to be done. Here, the safest bet is for you to find a firm like Chedid Storey Lawyers that are well-versed in property transactions, as well as building and construction law. This means that you get to work with the same team both during the purchase and later on during the sale/construction, which is a major plus.
Prepare for a waiting period
It might take several years for a parcel of land to sell, which is why you need to be patient when planning this move. You see, fixing and flipping a house is not the same thing as selling land and those who expect these experiences to transfer usually get sorely disappointed. Seeing as how this is an investment that might take years before giving you a reliable return, make sure that you’re only investing money that you can live without, for this period of time.
Talk to builders before choosing the site
Regardless if you want to construct your own home on the property or sell it to someone else, it’s value will be determined on the question of how good it is as a building lot. Think about it this way, a person who plans to buy a property from you and build a house on the location might come with a contractor or an architect of their own. Their opinion will be crucial when deciding whether to buy the property or not. So, why not prepare for this occurrence in the same manner? Start by talking to builders and contractors and take them along when surveying the property.
All in all, it’s more than clear that investing in land is one of the best, yet horribly underrated real estate investment options. It’s also a much safer choice, seeing as how a vacant land isn’t nearly as expensive as a vacant real-estate property (both residential and commercial). With the above-listed six tips on your side, this can truly become an amazing opportunity.