3 Tips to Consider When Buying Vacant LandCenturyTree
Tip #1: Look (and Plan) Ahead
The value of vacant land is primarily in its potential — specifically, the possibility that it may be prime real estate for future commercial or residential development. In order to hold that promise, however, the land needs to be properly zoned, with the right entitlements to ensure that your big plans for the future are actually achievable. After all, you’re not going to have a lot of luck using your land or selling in the future if no one can actually use it.
When considering a plot of vacant land, be sure to get a full picture of what the land can and cannot be used for. Also take into account the topography and what sorts of utilities are already there versus what you’ll have to set up and install. Cheap land isn’t so cheap if you’ll need to raze it and install water and other utilities before it will be appealing to buyers.
A phone call to the County Planning & Zoning office to ask questions about what they’re seeing in the area and specifically asking them about “approved projects” that may not yet have broken ground or projects “pending approval” would be well worth your time. That information is available, all you have to do is call and ask.
Tip #2: Tally Your Taxes
Vacant land is hardly a one-and-done purchase. You’ll have annual costs that you’ll need to factor in to your investment budget as well, and depending on where you’re buying and how long you’re planning to hold the property before you sell you may end up spending more in taxes than you realize. Be sure that you understand your tax commitment, and that it’s in line with your current and future financial planning. This can be clearly understood by contacting the County Tax Collector/Assessor’s office and providing them with the APN or Property ID.
Tip #3: Think Short Term
As a rule of thumb, you always want to be thinking of getting a return on your investment sooner rather than later. A lot can change over time, and any changes have the potential of reducing the value of your property. The sooner you can sell it to a new investor or developer, the less risk you’ll incur in terms of market changes and dips. We have customers who have harvested the trees on their property to offset their purchase as well as some who have constructed homes or bought additional adjacent acreage to increase their land holdings and therefore, what they can do with their property. We have also had customers who have subdivided their property and then sold off tracts to friends and family members. These are all viable options and worth consideration.