Tips on Buying a Building Lot

The real estate truism that location is everything should guide you when you’re shopping for a building lot. You control your housing destiny more because you pick the location. And that means you’ll need to do more homework to make sure you get the best location possible.
It’s important to remember that a great house on a bad lot will not be as good an investment as a smaller house with a great location. The extra time and effort you spend finding the best location you can afford will pay bigger dividends later on.
The first step in lot shopping is to make a list of all the possible sites you’re interested in. The more lots you have to choose from, the better. Once you’ve completed the list, the next step is to start the process of elimination. The following tips will help you do that. Check with the city or county planning authority and see what’s planned for the area. If there’s a master plan, study it carefully. The secluded lot you love now may be next to an industrial park in 10 years, according to a zoning master plan. Look at the growth patterns for your area of interest. If all indications are that the area will increase in value, that’s a plus. Also, check and see if any highways, off-ramps, or access roads are planed for the area. And, of course, find out if the area is currently on the upswing or is declining in value. Get a copy of any zoning and restrictive covenants (CC&R) for the development or area. The better the area, the more restrictions on what you can build. However, that can often be a plus because restrictions tend to keep home values up.
For example, Brent and Susan found a great deal on a lot next to a newly completed golf course that the local municipality was selling as surplus property. A look at the CC & Rs revealed that homes had to be 1,200 square feet or more on the main floor along with an attached two- or three-car garage. The restrictions also limited their landscaping options and required an underground sprinkling system to keep the lawn and shrubs in good condition.
Brent and Susan were planning on putting a modular home on the property and had picked out the plan they liked. Unfortunately, it was only 1,150 square feet on the main floor and had a carport instead of a garage.
Getting in touch with the design people at the factory, the homebuyers were able to increase the square footage and enclose the carport to create a garage. This stretched the loan they could qualify for to the limit, but they felt it was worth it. Area values should increase in the years ahead and justify the additional expense. Check out the cost of utilities. A cheaper lot that costs more to run utilities into may not be as good a deal as one that has them stubbed at the property line. For instance, it’s usually more expensive to run electrical lines underground than overhead. And running water, waste, and gas lines at $10 to $20 a foot each, depending on the area, can run up site costs fast.
Make sure you have all your building site ducks in a row. Get all the necessary building permits, utilities, and hookup fees nailed down. Next get the site-work subcontractors lined up and bid prices locked in and in writing if the home dealer doesn’t handle that.