I usually see a few ads in the local paper regarding land for sale. Most of the time it is unimproved, but occasionally there is a single house on a vary large peice of land. The price for these peices of land always seem way too good to be true. For example, there is an current ad for 10 acres of land for $50,000 obo in an area that is experiencing tremendous growth.
Is there anything I need to be looking out for when people are offering these large peices of land for such low cost? I realize they are unimproved and would need a lot of work. But my thought is, if I can purchase 10 acres for $50,000, I’m sure I could work with a developer that could build quite a bit of houses on the land and we could split the profits or something. Any insight into purchasing land would be appreciated.
My husband will not pay over $2,000 an acre for unimproved land (in cities just south of Atlanta). A development costs a lot of money and there is a ton of redtape to deal with. You will want to check with the existing zoning, the zoning laws for the city and how to go about changing the current zoning, way before you purchase. A new one that came up here recently is a minimum of 1.66 acres per house in one city and 5 acres in another. This is their way of slowing development.
And, as I was driving back from a property today I realized, you will also want to check the flood zone maps for your properties of interest. I recalled one piece of unimproved property I visited with my husband recently. He chucked the deal because over half of it was unsuitable to build due to the flood plane issues.
You can make money, just do your research first. Good luck to you.
Zoning and wetlands are your main concerns. Also utilities are also another concern. Does the lot have electric near by? Sewers or septics? Well or public? Natural Gas or propane? These are also important. Also are the lots along a road or street or are they “inner lots” that have to have a road built to get to them. Or are they located on “paper streets” that you would have to build a road to get to. Once you have to build roads, you have to the land next to nothing to just make it worth it. Also all the approvals through city hall will make this even more fun.
How about just purchasing the land and holding it for a year for appreciation, or in hopes that a developer eventually comes through the area and wants to purchase from me? I figure this is easier than building myself.
If a developer wanted it, they would have bought it yesterday. Many of the home builders have purchased land that will last them a good 10 years or so. Also zoning is the biggest factor, that 10 acre parcel may only be able to be split into two lots, or maybe it can’t even be split! You need to find out with the town, don’t ask the guy who is selling it or the realtor, they are trying to sell it. Get it from the town, also look at the adjacent properties and get a list of all of them. Then go to epa.gov and look for “superfund” and sites with known contamination. You don’t want to own land next to a landfill or toxic waste dump. Also if possible look at the town maps, sometimes landfills and dumps will be listed on these too, and you should be able to look at a flood map, this will show you were the flood zones are. Don’t just buy because you think it’s going to be worth 200k next week. Land is very risky, if a builder built a thousand homes in that area but only sold 900, land is going to tank because no one is going to build homes in a slow market.
if you want to develop land, put road, storm, sanitarty and water in, as a rule of thumb, figure about $200 per foot. 7" Paving is about $33 per SY, 8" Watermain is about $33 per LF, 12" RCP Storm is $24 per LF, 8" PVC Sanitary is $24 per LF, and site grading at about $6 per CY