If you are planning to build your dream house or even a getaway cabin, you’ve probably been talking about finding the perfect piece of land. You may have already begun to look, only to find that bare land is at a premium in many parts of the world, and that there are plenty available for construction that can come with severe restrictions. That doesn’t mean you’re going to have to compromise or make an impulse purchase of the next parcel that comes along. Instead, check out the next two and don’t buy land because you’re going to end up with the land you’re going to enjoy.
Do Work With An Estate Agent Who Specialises In Land & Building Lots
You are more likely to find appropriate land when you deal with an agent who focuses on buying and selling lots and acreage rather than one that specialises in existing houses or commercial property. A professional agent will keep an eye out for the right land and let you know when something new hits the market. Plus, you’ll have an expert who knows the various forms of finance available purchasing land and properties in the UK.
Don’t Overlook Cheap Home Listings That Look Like Fixer-Upper Jobs
Bare land that is ready to build on is scarce in many communities and mostly restricted to plots where only a home that resembles every other house on the same road can be constructed. Potential buyers often overlook a great source when hunting for land: cheap fixer-uppers! Such homes are often marketed for less than the value of the land on which they sit, and by demolishing the current home and constructing a new one, you might end up with a lot in a well-established neighbourhood.
DO Consider Home Prices In Surrounding Areas
Create a house of equal value to those nearby for the best long-term investment. If you build a £400,000 house in an area where the other homes are selling for less than £200,000, you will have a hard time finding a buyer if you want to sell it later. In fact, the lender does not want to fund a house in a price range that does not suit the market prices of other houses in the area if you’re set to a particular house plan, select land in a neighbourhood of homes of similar value.
DON’T Expect A Standard Loan When Buying Land
Banks and lending companies are wary of lending money for bare land and lots because they can not sell such loans on the secondary mortgage market to financial institutions such as Fannie Mae. If the bank can’t sell the loan, they can’t get their money back, which means the bank is at risk if you want to leave. In order to minimise the risk, some borrowers may request a significant down payment of up to 50% of the purchase price, but others may absolutely refuse to lend cash for bare ground. You will need cash to purchase the property, or you might be able to negotiate a deal to fund the sale, often referred to as a property contract, which means that the sale will sometimes let you pay off the land in instalment payments.
DO Investigate Restrictions On The Property Before You Purchase
The time to find out whether a piece of land comes with limitations in the form of agreements or regulations is before you make a bid. In some areas, you must own between 5 and 40 acres, before you are permitted to build a house on it. There may be easements and legal restrictions in residential projects that limit not just where you can build property, but also the size of the building. Other constraints can determine what kind of siding you may put on your house or how steep the roof must be. Covenants and laws can be somewhat restrictive, so please check with the developer or the local council to assess the severity of any snags.
DON’T Count On Having The Property Re-Categorised After You Buy It
Eager-to-build buyers also want to purchase a specific piece of land so badly; they claim they’re going to be able to deal with categorisation problems afterwards. Unfortunately, there is no guarantee that you will get the property resettled to residential industrial or strict agricultural land after you purchase it — no matter what the current owner tells you. If the land in question is not currently categorised for your intended intent, make a bid, but make the sale contingent upon acceptance of the rezoning. That way, if your request is turned down by the local council, you would not be left with a piece of unusable property.
DO Have Environmental Testing Done On Land, Not Part Of Existing Development
In the approved construction, the developer most likely underwent environmental monitoring as part of the subdivision and plating process. It’s a different matter, though, whether you purchase property that’s rural acreage or a lot in the city that has been unused for a number of years. Soil pollution or polluted groundwater, such as that which could occur if the vacant land was once used for a petrol station or storage facility, may either prohibit you from obtaining a construction permit or pose a safety hazard for your family at a later date.
DON’T Underestimate The Cost Of Building A New Home
Unless you’re searching for a piece of prime beachfront property, the cost of land is typically the least costly component of any building project. Nationally, the median cost of constructing a new house is about £150 per square foot or about £286,000 for a 2,000-square-foot house. And that’s just the house; if you’re building on undeveloped land, you’re still going to have to make a difference in getting services to the construction site, as well as setting up a private sewage system and a private road. Such expenses – along with the expense of obtaining permits and surveys – will add another £15,000 to £75,000 to your final bill.