Purchasing raw land can be a lucrative investment opportunity, but it's essential to conduct thorough research and consider various factors before making a decision. Whether you're looking to
Top 5 Things to Look for When Purchasing Raw Land in the United States
Dated: July 13 2023
Purchasing raw land can be a lucrative investment opportunity, but it's essential to conduct thorough research and consider various factors before making a decision. Whether you're looking to develop the land or hold it for future use, careful evaluation is crucial. In this article, we will explore the top five things to look for when buying raw land in the United States. By considering these aspects, you can ensure that you make an informed decision and maximize the potential of your investment.
1. Use Potential:
When evaluating raw land, it's essential to assess its use potential. Understand the current zoning and use restrictions to determine if your intended purpose aligns with the property's existing classification. Rezoning can be a challenging process with no guarantee of success. Additionally, consider the costs associated with making the land usable, such as installing utilities, access roads, and other necessary infrastructure. These expenses can significantly impact the overall value and feasibility of your investment.
Location plays a vital role in the value and potential of raw land. Consider how the land's location aligns with your investment goals. If you plan on residential or commercial development, evaluate the demand for properties in the area. For those seeking privacy, assess potential interference from neighboring properties or roads. Remember, while you can modify many aspects of raw land, its location remains fixed. Hence, carefully consider location as a top priority.
3. Previous Ownership:
Gaining insight into the experiences of the property's previous owners can provide valuable information. Try to gather details about why they are selling and any challenges they faced. Understanding the reasons behind the sale and potential issues can help you assess the property's suitability for your needs. Inquire about any problems related to flooding, soil quality, or other relevant concerns. This knowledge will enable you to make a more informed decision.
4. Permit Requirements:
Before making any improvements or developments on raw land, be aware of the permit requirements. Familiarize yourself with the necessary permits, the process to obtain them, associated costs, and any restrictions or regulations. Common permits include building permits, environmental permits, zoning permits, and sewer and water permits. Understanding these requirements upfront will ensure a smoother process when implementing your projects.
5. Environmental Concerns:
Conducting environmental testing is crucial to identify any potential concerns that may hinder your plans. Pollution in water sources or contaminated soil can pose significant problems with expensive remediation costs. These environmental factors can also limit the land's usability. To protect your investment, include an environmental contingency in your offer, allowing for an assessment period. This contingency safeguards your earnest money and informs the seller of your intention to undertake environmental evaluations.
When purchasing raw land in the United States, considering the top five factors outlined above will help you make a well-informed decision and maximize the potential of your investment. Evaluating use potential, location, previous ownership experiences, permit requirements, and environmental concerns will ensure that you purchase land that aligns with your goals and offers long-term value. Remember, it's always advisable to seek guidance from an experienced REALTOR who can provide valuable insights throughout the process.
REALTOR with Crown Realty
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