Owning raw land is sensible if you do not need to have an immediate profit from it. You can always build on it later should you decide to live on it, or else erect a home on it and rent it out. Raw land makes financial sense if you buy it in locations where there is cheap land and you either pay cash or take out an inexpensive loan. On the other side of the coin, where the land is expensive to buy, such as in the cities or else very popular vacation areas it is far wiser to erect a structure for receiving a source of income. In relation to the value of the property, the cost is negligible as the rental generated could cover costs and provide a good income in an area were there is a high demand for housing.
How to search for land
When searching for land to buy, consult a realtor who specializes in transactions of raw land for sale. He can give you good advice regarding the best areas for your investment potential or else, go and have a good look round for yourself to see what is available on the market for sale in the areas that appeal to you.
However, do bear in mind that while everybody needs a roof over their head not everybody needs raw land, meaning that there are likely to be fewer buyers for empty lots should you change your plans at a future date and want to offload it in a hurry.
There is still a monetary outlay required on raw land. If it is a site in a development, you will be involved with paying homeowner’s association fees and property taxes as well as be responsible for maintenance of any dirt access road or trimming of trees as needed.
Buying in rural areas
Deciding to buy land in a rural area that is presently undeveloped, first of all make enquiries as to whether there are going to be known changes in the area, such as a housing development or even a strip mall. You do not want to find that what you thought was always going to be an open space is going to have an effect your view.
Higher down payments are often demanded for loan rates to finance purchase of land. Lenders do this to offset any risk involved of being stuck with the property after foreclosure. If you cannot pay cash for the land you want to purchase, consider taking out a second mortgage on the property you already own.
Do your homework
Before signing for a land deal check with the local building and zoning officials regarding permits for building and restrictions on building types and setbacks, as the property could come with permits for septic fields or even other improvements. You do not want to find the permits have expired before you want to build. Should you need to have a well, this can be very expensive to install.
Author Bio: This article was written on the behalf of Dignam Land. For close to a century they have been selling vacant land in Canada.
NOTE: AmeriFirst Home Mortgage does not finance the purchase of land. As a residential mortgage banker, AmeriFirst helps finance the purchase of a house for a home buyer.