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Top Mistakes to Avoid When Buying Land
Buying property can be an excellent real estate investment, but many land buyers don’t know how to tell if a property is a lemon or not. Land purchases are very different from buying a home.
It’s essential to be well-prepared not only for your wants but the things that could make your property purchase a nightmare. So we’ve pulled together some top common mistakes made during a land purchase.
Failing to Properly Fund and Financially Protect Your Investment
There are two essential parts to your financial obligation when buying a property. First is funding the investment. The second is protecting the investment, so you don’t lose money.
Ensure you understand your loans, the likelihood of returning a profit off your land, and that you’re not overpaying in interest. Then get the right insurance coverage lined up so you’ll be protected as soon as you close the deal.
Not Verifying Land Rights
Another hidden problem is understanding the rights to your land. For example, you may assume that you’ll automatically have access to proper roads and resources on your land because you own the land. But this isn’t necessarily the case.
A private road may not be automatically available for you to use. And there may not even be an existing road to your land, so you need to understand the process of creating one.
Additionally, private land may have pre-existing deals with other parties for natural resources, like lumber and oil. If you don’t understand the legal rights to your land, you may wake up to loggers clearing your tree line and dramatically changing where you live.
Not Thoroughly Verifying the Territory
You should never buy a property that you have not personally walked at different times of the day. Evaluating a property’s potential and risks is much more complicated than understanding a home’s risk.
You also need to thoroughly understand your neighbors, any border disputes, how they are using their land, and how changes to their land could impact the usefulness of your land. For example, imagine you buy the perfect, quiet hunting land. But if a neighbor develops their land three years from now, your animal patterns could change dramatically.
Ignoring Potential Environmental or Historical Concerns
Finally, many potential landowners don’t know that undeveloped land may have environmental or historical claims. For example, suppose a protected species or old graveyard are within your property. In that case, laws may restrict the changes you can make to your land.
These are not things you can find by simply looking at the land. Check with the EPA and the National Register of Historic Places to ensure you understand what’s beneath the surface of your land.
Ready to Buy an Investment Property? We Can Help!
At AltaTerra Realty and Auction LLC, we serve Texas, Oklahoma, and Arkansas in expanding their business through quality land purchases. It’s critical to work with a team that understands your vision and values– and that’s what we’re here to bring to life.
Contact us today to begin your search!https://www.nps.gov/subjects/nationalregister/faqs.htm#:~:text=How%20old%20does%20a%20property,be%20considered%20eligible%20for%20listing
Additional References: https://www.nps.gov/subjects/nationalregister/faqs.htm#:~:text=How%20old%20does%20a%20property,be%20considered%20eligible%20for%20listing
https://enviro.epa.gov/facts/myproperty/
https://www.ruralonly.com/blog/first-time-land-buyer/
https://www.landresellers.com/blog/important-land-buying-mistakes-to-avoid
https://housing.com/news/due-diligence-land-purchase/