Five Tips for Making a Wise Investment When Purchasing Land
As an investment, land has great versatility; one can either build on it immediately or hold the property to sell to another investor after its original value has increased. However, not all land for sale is equal value for the money. Potential buyers need to do some research and make sure that the property they intend to buy will be a wise investment. Here is a quick look at 5 essential tips that will help you to make a wise investment when you are looking to purchase real estate with the goal of making money.
Purchase in a Desirable Location
Although one may be tempted to buy any land for sale in Delaware, or anywhere else for that matter, being offered at the right price, good value is a relative term in land acquisition. How close is the property to the city or major attractions such as the beach or mountains? Is it near shopping facilities and other amenities? Location is the single most important thing to consider when buying a piece of land and can really mean the difference between a purchase and an investment.
Buy Property with Good Access to a Road and Utilities
Good location is not enough; one also needs to make sure that the property is accessible. This not only means that there are roads in the vicinity, but also ideally that the home has easy access to a nearby highway or interstate. Also, will future homeowners be able to hook up utilities with ease? Has the soil been tested for future septic installation? These are crucial considerations if one wants either to develop the land or sell it to a future developer.
Check the Zoning Bylaws
In addition to having access to the property, one must know exactly what the zoning restrictions and limitations in the area are. A vacation home will hold no value if a business goes up next door or if taller buildings are erected to obscure the view. Likewise, one may not be able to turn a profit on a large piece of land that cannot be subdivided. There are also some areas that will limit the changes that you can make on the property and home that you purchase, which is another important consideration that needs to be made if you want to make significant changes to the estate that you are planning to purchase.
Find the Right Time to Buy
When buying land, it can be smart to avoid the prime real estate season. If an investor makes an offer on the property in the off season, they may be able to negotiate a better price. You should also be wary of buying homes when the prices seem unreasonably high, since this can indicate that the market is at a peak and that it might drop soon, which can cause you to lose money if you choose to invest during this time period instead of waiting for prices to lower.
Know Whether it is Cost Effective to Build on the Land
An investment diminishes considerably if the cost of building eats into the potential profit to be made. In some locations, the cost of a new building is prohibitive, and one might be better off purchasing an existing property to renovate. Take a look at the local laws, taxes, and the rates that will be charged by local contractors for their services. You will need to take into account all of these different expenses if a piece of land needs to be built on to turn it into a good investment.
Provided that the buyer does their research carefully rather than simply looking to get a great deal, land can make an excellent investment for the future. Smart choices and some forethought put the logistically-minded buyer in a position to turn a good profit.
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Category: Investing, Real Estate
