Buying a vacant lot gives you total freedom to build your dream house, which is essential if there are a lot of customizations on your list. However, it’s not as easy as you may think.
To choose the right land for your future home or investment property, these are the most important factors that you have to consider:
1. Zoning regulations
Before buying real estate properties for sale, learn about the local zoning regulations. Blocks of land can be used as residential, commercial, and industrial lots. So if you are buying a residential plot next to a commercial one, it may not be ideal if you are aiming for a quiet place to settle down.
2. Financing options
To finance your land purchase, you need to find a lender that is willing to give you a loan for a vacant lot. Most lenders consider land loans as risky because if your finances dip, the tendency is to pay for your current house and other obligations first. To secure a land loan, lenders will usually require a higher downpayment and a shorter loan term, as well as a good credit score.
Securing a land loan with a lender is usually the cheapest way to finance land. Getting other loans, such as a personal loan or a home equity loan, are also viable options but typically have higher interest rates.
Similar to looking for an already existing house, the location of a lot is another important factor to consider. If you have children or are planning to have them in the future, look for a location that has a good school district and plenty of safe spaces for recreational activities. If you are planning to retire in the house you are going to build, choose an area that is quieter and more laidback. Think about your needs, your current lifestyle, and your future in order to find the best location for your future house.
Checking the quality of the land’s soil is an excellent way to tell if the lot is suitable for construction and landscaping. The quality and composition of the soil can affect your building plans, the cost of materials and labor, as well as the type of plants and trees that you can plant on the property. Thus, before buying a piece of land, have the soil quality checked by a reliable professional first.
A primary advantage of building your own home is that you get to decide where it’s going to face. You can maximize the view from the master bedroom, decrease the amount of direct sunlight, and avoid facing the living room directly into the neighbors’ windows, among many other things. At the same time, you should also consider the spaces around other structures, whether they are already existing or not, to orient your house in the best way.
Whether you are buying a vacant lot to build your forever home or making a real estate investment, consider these factors before you sign on the dotted line. Even if the land is bare, there are much more than meets the eye, and being thorough is the best way to ensure that your money is going to a good place.