Investing in government land is one of the smartest moves in real estate. Owning land in its raw form comes with significant benefits. The simplicity and stability of owning vacant land at a friendly price should not make you ignore due diligence before staking your money. Considering the other side of the story needs careful consideration. Check out the following features of government land that smart investors never ignore.
This regards what you can use the land for. Discovering this requires calling the local planning and zoning department. Understanding zoning classification gives you a picture of the type of property to put up on the land. Zoning classifies land for residential, commercial, mixed-use, industrial, and agricultural use. Getting to know the zoning allows determining whether the land will fit your needs.
When buying government land out-of-state, understanding its topography is vital. This ensures that you are not going to end up with land having unpredictable elevations, mountains, cliffs, and valleys. Topography determines the build-ability of the land. Preliminary research to discover the topography of the land allows making an informed decision. You can use a topography map from Earth Point or Google Earth. Understanding precisely the hills and valleys on the land allows determining whether it fits the property you are considering.
Local building laws
Now that you have understood the zoning and topography of the land, it is equally important to evaluate local building laws. These impose regulations regarding building consistency and safety in a particular area. Going online to find government land for sale and understanding that there is enough room for building something worthwhile is important. You need a piece of land with enough room to support your proposed project.
Holding onto land regardless of time comes with a tax bill relative to the actual property value. Keep in mind that land in particular parts of the country come with ridiculously high taxes. Investing in this type of land exposes you to a huge financial cost for years to come. The ideal land to invest in should have an annual tax bill at about 1 to 4 percent of the full property value on the market.
Land with access to public utilities is build-able. It is worthwhile to build property without access to clean water. Buildable government land is more marketable, usable, and more valuable. When investing in government land with the intention to build on it requires being aware of access to public amenities including:
- Phone lines
- Sewer line
Each part of the country has a plan on how to use the land regardless of ownership. So, expect the land you purchase to come with some limitations regarding how to use it. Keep in mind that land under jurisdictions of Home Owner’s Association comes with more stringent restrictions. These aim at maintaining the formality and quality of the neighborhood.
Additionally, the restrictions limit bizarre behavior in the neighborhood.
Restrictions maintain order and support of the land. Understanding these restrictions prevents you from getting into conflict with local authorities. Due diligence is necessary for land investors to ensure that you are in harmony with prevailing laws. It protects you from ending up with hefty maintenance bills on the property.
Contaminants on the property
Some vacant land might have been a makeshift landfill. Before putting pen to paper, ensure to verify that the land is free from contaminants. Clearing messes on the land is quite expensive to clear. Investing in the land without any contaminants avoids unwanted surprises upfront. For due diligence before investing in a distant land, contact a local real estate agent for some pictures of the property. Being clear about what is on the land allows determining whether to buy the land or not.
States have environment laws regarding land zoned for commercial use. When investing in government land for commercial projects, ensure not to inherit environmental contamination on it. This is through requesting a Phase I Environmental Report. This is very important and banks request it when staking the land as collateral. The report identifies any Recognized Environmental Concerns on the land to give you peace of mind.
Ignoring due diligence makes you inherit liability for present environmental contamination on the land. This will make it hard for you to sell the property in the future. Additionally, check historical satellite images of the land from Google Earth to determine previous use on the property. This is easy, quick, and doesn’t cost anything.
Government land is a wonderful option to grow your real estate portfolio. Acquiring this land is convenient, hassle, free, and cheaper. However, due diligence is necessary to save yourself various problems in the future. Ensure to check the topography, previous use, access to public amenities, and local building laws. Understanding these allows determining whether to but the land or not. It also protects you from future problems after investing your money.