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HOW TO BUY VACANT LAND – IMPORTANT DO’S & DON’TS YOU NEED TO KNOW
HOW TO BUY VACANT LAND – IMPORTANT DO’S & DON’TS YOU NEED TO KNOW
Finding and buying a piece of vacant land sounds easier than buying or building a house. However, buying land can be tricky and time - consuming for many reasons. If you’re planning on buying land, here’s what you need to know before you start scouring properties and how to avoid making a big financial mistake.
WHY BUY A VACANT LAND ?
Staking a claim on vacant land and raising a house is a Nigerian dream that goes back hundreds of years. Whether it’s to build a tiny house or a larger dream home, some pioneering spirits are willing to take a chance to create exactly what they want. But not everyone buys land with the intention of building a house on it. Plenty of people buy land for more unconventional reasons.
OTHER PEOPLE BUY LAND AS AN INVESTMENT.
Especially common in real estate markets where land values maintain a slow and steady climb upward. Buying and holding on to land for two to three years can yield a solid profit, especially if you do something to improve the land while you own it. However, this can be risky, especially if the market takes an unexpected nosedive after your purchase.
DO’S & DON’TS OF BUYING VACANT LAND.
Finding a great real estate agent is imperative when you’re looking for vacant land. A good agent from Adriano Properties will educate you about the area and research what each parcel is zoned for and what it’s really worth. A great agent can also keep you from making a financial mistake.
DO: UNDERSTAND ZONING LAWS
Every town, city, and municipality has zoning laws that regulate what land can and can’t be used for. These laws protect every landowner and homeowner’s investment and ensure the area is growing in the right direction. It’s important to understand zoning laws so you buy land that’s zoned for your desired purpose. Imagine you want to buy some land and start a self-storage business. You find the perfect-sized lot just outside of a busy downtown, and you’re ready to make an offer. However, the land is zoned residential, not commercial, which means you can’t legally operate a business there.
RESIDENTIAL
Areas zoned residential allow single-family homes, apartments, condos, duplexes, and co-ops. If you work at home, you may face some restrictions in residential zones. If you telecommute, you likely won’t have a problem.
However, if you have customers that come to your home for business reasons or you employ staff, you might find yourself in violation.
DON’T: ASSUME YOU’LL GET A BANK LOAN
Many banks won’t grant you a loan to buy land. If you’re lucky enough to get a loan, you might not be granted more than 50% of the land’s value. Banks see land as a risky investment, especially if you plan to use it for unconventional living or working arrangements. If there’s no house on it, then it’s considered a red flag.