Why would you want to buy unimproved property?
I love buying land because it’s a tangible investment that I can see, walk on, improve over time to build equity and pass on to my heirs. I think everyone should have a little bit of land in any investment portfolio. If you’ve always wanted an island property, this is a great time to invest in land!
Buying property, especially undeveloped land, may be a bit intimidating so I’ve prepared a list of resource links that might be helpful in your research. Whatever property you choose, some key factors must always be considered….
Are you sure you know where it is?
Does it have water?
What are your options for septic?
Do I have to pay cash or are there loan programs available for land?
Often sellers are willing to help finance your purchase for 5 to 10 years. You will probably need to offer a 20-25% down payment and pay an interest rate 1 to 2% over what a residential loan at a bank might cost.
One of the best ways to buy vacant land is a HELOC if you have equity in your principal residence. This way, you can offer the seller a CASH offer and possibly have more negotiating power.
Is it hard to get permits?
Each county is different, but most will require proof of water availability and a septic design in order to secure a building permit. Timeframes will vary depending on time of year, but you should probably plan on 2-6 months from time of permit application until you can start to build. If your property is waterfront, it can take longer as there may be other studies that will need to be done first. Some people choose to hire a professional to help them with this process.
Critical Area Ordinance – FAQ