You think you’ve come across the perfect piece of vacant land, and you’re getting more excited about it every day. It matches your budget, the location is great, and you’re already picturing how your dream home is going to look amongst the trees. But before you sign on the dotted line, take a deep breath and slow down. Buying land is completely different than buying a house, and mistakes can be very expensive.
The biggest difference between purchasing vacant land versus buying a home is that there is not going to be a home inspector who checks out the property, and, in addition, you will not have any walk-throughs to identify problems with the land. One small detail that goes unnoticed may end up costing you dearly. Issues like access rights, zoning problems, or soil issues could very well turn your investment into a complete nightmare.
In order to protect yourself and to make sure the piece of land will achieve your goals and vision, ask yourself these five questions before making any kind of offer on vacant land.
Question 1: Does the Property Have Legal Access?
The ability to legally access your property can make or break your purchase. Often, this is an overlooked aspect of buying vacant land. While you may be acquiring the vacant land legally, if there’s no legal way to access that vacant land, it will become an investment that you can’t use!
Understanding Access Rights
Having access via public road is the best. If the property you intend to purchase is located next to a county or state road, you will have guaranteed access to your property no matter what.
However, many of the rural parcels of land have private easements granted by the neighboring property owners. Here are some of the issues you need to consider:
- Deeded easements are recorded legal rights to cross specific land parcels
- Prescriptive easements arise from long-term historical use
- Easements by necessity may exist when property is landlocked
- Shared access arrangements involve multiple property owners
Verifying Your Access Is Solid
You need to look beyond the seller’s statements regarding access. Ask the seller for written documentation verifying that legal access does exist and will be transferred to you as a property owner once you complete your purchase.
If the access to your new property crosses private property, be certain that you verify the existence of:
- The easement is permanent, not temporary
- It transfers automatically to future owners when selling land
- Width allows for your intended use (vehicles, construction equipment)
- Maintenance responsibilities are clearly defined
An attorney who specializes in real estate can review these documents and verify the eligibility of access rights.
What Happens Without Legal Access
Purchasing property without a guarantee of access is dangerous. If you cannot prove that you have legal access, then you will not be able to obtain a building permit. This means that construction companies won’t be able to deliver materials to the new structure. Neighbors may also prevent you from gaining access to your property and require you to engage in costly legal action to obtain access.
Before purchasing a vacant parcel of land, make sure that you drive or walk along the access route in order to verify that you will have a means to get to your property.
Question 2: What Zoning Restrictions Apply to This Land?
Zoning will dictate what uses are allowed on the vacant property; it is very important to address this question with the intent of preserving your ongoing plans.
Current Zoning Classification
All that you can do with any piece of property is controlled by its zoning. For example, is the property zoned for residential, agricultural, commercial, or recreational purposes?
| Zoning Type | Typical Permitted Uses | Common Restrictions |
|---|---|---|
| Residential | Single-family homes, duplexes | Minimum lot size, setback requirements |
| Agricultural | Farming, ranching, one dwelling | Limited subdivision, livestock regulations |
| Commercial | Businesses, offices, retail | Building size limits, parking requirements |
| Recreational | Camping, hunting, minimal structures | No permanent dwellings |
You can contact the county planning department for information on your specific parcel number. Where possible, get everything in writing.
Restrictions That Limit Your Plans
In addition to basic classification zoning restrictions, there are counties with additional restrictions (i.e., they have a minimum number of acres that are required for each dwelling unit, and they may limit the height of buildings).
You will have to follow additional regulations imposed by an HOA if your vacant land is located in an HOA. The HOA can impose regulations on the following:
- Fence types, heights, and materials
- RV and boat storage visibility
- Livestock and pet restrictions
- Building colors and exterior materials
Before you purchase land, you should check the zoning restrictions and any applicable HOA regulations against what you intend to do with the property or business.
Future Development and Zoning Changes
You should also do some research on what will happen in the future with the property around your land by contacting your respective city’s planning department, including:
- Pending zoning changes affecting your parcel
- Approved development proposals nearby
- Long-term comprehensive plans for the area
- Infrastructure expansion plans
Understanding the past and current trends of growth will help you make a wise investment and be happy in the long run with your choice of land.
Question 3: Are Utilities Available or Affordable to Install?
When purchasing vacant land, utilities frequently represent the greatest unexpected costs; therefore, knowing the answer to this question is essential for accurately budgeting your project.
What’s Already There
Almost all raw land in western states does not have utility hookups. This is expected with inexpensive, undeveloped properties, but it is important to understand what utilities are at the border of the property:
- Contact electric utility with your parcel number for extension costs
- Call water districts to verify municipal water availability
- Check if natural gas lines run nearby
- Research internet and cell coverage
Extending utilities can really surprise buyers. Power service to your rural land may cost $15,000 to $50,000, depending on how far away you are from an existing power pole.
Well and Septic System Costs
Without connections to municipal utilities, you will need to drill a well ($5,000-$30,000) and install a septic system ($10,000-$25,000). Varying types of soil can cause additional issues:
- Sandy soil drains well but may contaminate groundwater
- Clay soil drains poorly, requiring expensive alternatives
- Rocky terrain increases drilling costs significantly
- High water tables complicate well and septic placement
Prior to buying any land, it is a good idea to pay for soil percolation testing ($500-$1,500). If your soil fails a percolation test, then you may need to consider installing an alternative system ($20,000-$40,000). These costs need to be factored into your overall land cost.
Alternative Solutions for Off-Grid Living
Many prospective homeowners are excited to venture into the realm of off-grid living. When you go off-grid by purchasing raw land, the need for utility extensions is alleviated by the use of solar energy to power your home. Rainwater harvested can be used in addition to using a well for a water supply.
While these systems both work well together, they do not come at no cost:
- Solar systems with battery backup: $15,000-$35,000
- Rainwater collection systems: $3,000-$12,000
- Composting toilet systems: $1,000-$5,000
Find out what local regulations and building codes are before you buy. Some counties allow for the installation of off-grid systems, while many outlaw them.
Question 4: What’s the Soil and Terrain Condition?
The topography and soil composition of raw land determine how much it will cost to build on (if you are planning on building), as well as the value of that land when you go to resell it.
Soil Testing and Building Suitability
Testing soil before buying land is crucial. Through professional soil testing, you get valuable information about how the soil behaves when saturated with water, how stable the soil will be when built on top of it, and whether or not the soil is contaminated.
You will need to do perc tests before you install a septic system, which will tell you how the septic system is going to work (or won’t work) on that property, and what the quality of the effluent will be. Some of the key factors are:
- Percolation rate for septic functionality
- Bearing capacity for foundation support
- Expansive clay that damages structures
- Contamination from previous uses
Testing your property for the above will ensure that if you were to have problems down the line after you purchase, you won’t have to discard your entire project due to failure.
Flood Zones and Water Issues
Before you acquire vacant land, you should verify whether or not it’s located in a flood plain. If the vacant property you’re buying is situated in a flood plain, you may be subject to:
- Mandatory flood insurance adding thousands annually
- Restrictions on structure placement
- Elevated foundation requirements increasing building costs
After heavy rains, visit the property so that you can examine it for standing water, or mud erosion.
Topography and Development Challenges
Grading of hillside properties often incurs significant expenses ($10,000-$50,000+) above the basic cost associated with site preparation. When looking at properties that are hillside properties you’re considering purchasing, make sure to walk the land and note:
- Slope percentages and building impact
- Natural drainage patterns
- Rock outcroppings complicating development
- Clearing costs
Question 5: Is the Title Clear and Are There Hidden Restrictions?
If your title is not clear, you could be subjected to legal encumbrances on your title.
Title Search Essentials
Before buying land, always get a title search done by a professional. It will indicate who the property’s previous owners were and if there have been liens or claimants against the property. When there is a “clouded” title, it can involve:
- Disputed ownership from heir situations
- Unpaid property taxes creating liens
- Contractor liens from unpaid bills
- Judgment liens from lawsuits
Have the results of the title search reviewed by a real estate lawyer before you proceed.
Easements That Affect Your Use
There could already be existing easements to certain parts of your land by other people:
- Utility easements allow infrastructure access
- Access easements permit neighbors to cross your land
- Conservation easements restrict development permanently
- Pipeline easements prohibit building over infrastructure
While some of these easements are minor in nature, others may restrict your ability to build your dream home in the optimal location.
Deed Restrictions and Covenants
You should also review any recorded document that has an affect on the subject property. Some common restrictions include:
- Minimum square footage requirements
- Prohibited building materials or styles
- Livestock or business restrictions
- Prohibitions on mobile homes or RV living
Make sure that you can live with the common restrictions before closing.
Property Boundaries and Surveys
If the property boundaries are not clearly marked, you should hire a licensed surveyor to conduct a professional land survey. The survey will help to resolve any issues with boundaries, including:
- Encroachments where neighbors cross property boundaries
- Actual acreage versus deed descriptions
- Precise corner markers and locations
- Easement locations and widths
Accurate surveying is important when selling your property at a later time, as buyers want certainty about the land’s location and boundaries.
Protect Your Investment With Smart Questions
When you purchase vacant land, there are many opportunities that can become yours. You may be purchasing land for an incredible dream home; creating another investment, or establishing a retreat. Land purchases in areas with potential for rapid growth could appreciate very quickly as growth occurs nearby. In fact, land available now for owner financing at $100 per month could easily be worth many times that in several years.
You will be able to take advantage of these opportunities, only if you are doing your homework and asking the correct questions before making your purchase. These five questions to ask before purchasing vacant land will help to protect you from very costly mistakes. The majority of the issues associated with purchasing land without conducting due diligence are related to access issues, zoning issues, utility costs, soil conditions, and title issues.