Buying Land to Build a New Home
by Elizabeth Weintraub, Lyon Real Estate in Sacramento, California.
Whenever I discuss buying land with my real estate clients, I can't help but hear the theme song for that 1960's TV show ringing through my head: "Green acres is the place for me."
Laugh as you may, urban dwellers often idealize what it's like to live on acreage outside city limits. So before you decide to dump it all for "give me that countryside" and buy land on which to build your dream home, consider first the realities.
The things that could cost you big-time after closing...
Benefits to Buying Land
Land costs drop in the country. The further away from the city, the cheaper the acreage. Many people buy land because they want to build a custom home to their own specifications. They also want cleaner air and more space. Wide open areas without trees shading the house are perfect settings in which to install solar panels, which is a concern for many environmentally concerned buyers who use green building materials.
Drawbacks to Buying Land
Finding skilled craftsman willing to travel might be difficult. Some might not show up as promised and may want higher wages to compensate for the distance. Transporting building materials and paying for delivery will likely cost more over building a home in the city.
Although modern conveniences are available, they aren't always reliable in the middle of nowhere, which is why many home owners in the country use generators as a back up when utilities fail.
Going into town for groceries and other shopping needs generally requires planning and long trips. If it snows, and the roads aren't promptly plowed, you could be snowed in for days.
Renting Before Buying Land
If you are unfamiliar with an area, it might be a good idea to rent a home first before buying the land and beginning construction.
As a new resident, you can get to know the community first hand and hear stories from local owners that you won't hear if you pull up in an SUV with a fat wallet in your pocket asking about MLS listings.
Resale value is often softer in the country than the city. That's because the pool of potential buyers is smaller. If demand is low and supply is high, home prices will be more negotiable. As a tenant, you can try to time the real estate market and be ready to buy that parcel of land when it first becomes available.
7 Factors to Consider Before Buying Land
Source: The Balance
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