Buyer’s Guide: Buying Land, My Top 15 considerations
Building your own home can be one of the most rewarding experiences in your life. However, in most cases you’re likely to have to find some land to build on. What may seem a straightforward process is actually fraught with challenges, many unseen.
Buying land can also be a very time-consuming process; in fact, I’ve been looking for over a year trying to find a piece of land for our next family house site.
So, when buying land, it’s crucial to thoroughly evaluate the land you intend to purchase. I’ve put together a basic guide that will hopefully help you make a more informed decision about the land’s suitability and value to you. Here goes:
1) Soil Quality and Drainage
Most Important Rule: Get a professional geotechnical report that covers your full building platform and at least 20m around the house (my choice). Poor soil quality may require costly foundation solutions and additional engineering measures. These costs can be considerable, seriously impacting the total build cost. Getting out of the ground can be problematic, and even a really thorough geotechnical investigation can sometimes miss natural hazards like springs and rock formations near the surface. Also be aware of non-natural hazards like existing services.
Similarly, ensure that the land has adequate drainage to avoid potential waterlogging issues. Check the history of the land for any chemical or industrial waste. Even test for pesticides and herbicides where the land was once used for farming, forestry, horticulture, and viticulture.
Climate change is also impacting our land and waterways, so plan for increased water flows on your land and look for steep contours where landslips can occur. Plan your house footprint away from such potential hazards.
2) Land Size, Orientation, Contour, Services, and Utilities
Confirm the availability and proximity of essential services such as water, electricity, gas, and sewage. Consider the costs and feasibility of connecting these services to the property, as extensive connections can significantly impact the project’s budget.
If you have sufficient land, then you can always consider your own rainwater harvesting systems and septic treatment – but do your homework carefully as these systems and tanks are not cheap and require maintenance and servicing.
Is the land size too big or too small? Large land requires more maintenance but can provide more privacy and potential, whereas small lots can be easier to maintain but often lead to less privacy, recreational area, and plantings. This can lead to unpleasant experiences caused by neighbour disruption and noise. Also, consider if your land is near a river, pond, or the sea for local evening bugs like mosquitoes or sandflies.
Just because a piece of land has lots of contours doesn’t necessarily mean that your house needs to sit on a hill. Permits can be obtained to level building platforms and landscape the site to your taste. My rule is, the worse looking the site, the more opportunity I have to buy it at a better price and the more I can sculpt the site to my needs. Of course, the earthworks costs money, but for me this has usually worked in my favour.
3) Road Access
Assess the quality, width, and condition of existing access roads leading to the land and house site. Upgrading or improving road access to meet local requirements can incur substantial costs, so consider the accessibility and potential need for road improvements. Also, properties on unsealed roads may have perceived less value to buyers when it comes time to sell.
Remember that you will need to build a driveway to your house. This can be an expensive task if your house is located a fair distance from the designate property entrance.
4) Water Sources
Evaluate the availability and quality of water sources, such as wells, bores, municipal water supply, or access to nearby bodies of water. Assess any water rights or restrictions that may apply and factor in the costs associated with connecting to or drilling wells.
5) Boundary and Survey
Ensure accurate property boundaries by conducting a professional survey. This step helps avoid potential legal disputes and additional expenses related to boundary discrepancies.
Also check with the council planners for any future road widening or new roads planned near your property. I know purchasers who have been seriously impacted by real estate agents not telling them of planned council planned roading activity that has seriously affected their property value and mental wellbeing.
And never, and I mean never, assume anything!!!!!
Ian Thompson, Editor
6) Connectivity and Transportation
Consider the proximity to public transportation, highways, and other transportation options. Evaluate the convenience of commuting to nearby cities or transportation hubs, as this can impact daily convenience and potential future resale value.
Evaluate the distance and commuting options to business hubs, industrial areas, schools, hospitals, recreational facilities, and shopping centers.
The closer the land is to employment opportunities and good schools, the higher the property value may be. These amenities can enhance the livability of the area and potentially increase property values.
7) Future Development Potential
Research the area’s master plans, future zoning changes, or potential infrastructure projects. This information can provide insights into the development potential and desirability of the land, which can affect future property values. If your land is big enough, you may be able to subdivide your land and pay off your mortgage early.
8) Land Orientation and Solar Potential
When buying land, consider the land’s orientation in relation to sunlight exposure and prevailing winds. Optimizing the orientation can aid energy efficiency, heating and cooling costs, and the overall comfort of the house.
Even if your land is pointing north in the southern hemisphere, or south in the northern hemisphere, check for tall trees or buildings that might hamper your solar gain on your building site.
9) Noise and Air Pollution
Assess potential sources of noise pollution during the day and night, weekdays and weekends, such as nearby roads, airports, or industrial areas. Also, consider air quality concerns and the associated costs of mitigating noise and air pollution within the property.
10) Market Trends and Demand
Analyze the local real estate market, recent sales data, and land and property demand in the area. Consider market trends and potential future growth to gauge the investment potential and resale value of your completed property.
11) Legal and Title Issues
Conduct a thorough review of legal documents, including title deeds, easements, rights-of-way, and any potential encumbrances. Seek professional advice to ensure a clear title and compliance with legal requirements, which can impact project timelines and costs. Check to see if there are restrictions on where you can build your house.
If the land is part of a body corp or owners association, find out what your obligations and voting rights are. Do you have to pay an annual maintenance fee for common grounds or right-of-way upkeep? These can be onerous, especially if run by people who have no skills or experience managing such official entities.
Also check if the local authority owns any part of the land around your boundary. There are many instances where Councils absolve themselves of all responsibility to maintain the land that they are custodians of, and if there is a problem down the line, like a landslip, they may choose not to repair it, meaning you might have an eyesore to live with, or worse, a potential issue that could affect your property or its value.
12) Heritage or Conservation Areas
Determine if the land falls within any heritage or conservation areas, as this may impose restrictions on construction or require special permits. Understanding these limitations can help avoid costly compliance issues.
13) Local Planning and Consent Departments
If you are looking at various pieces of land to buy that are governed by different planning and building consent departments, then research how easy it is to build in each area. Not all building departments behave equally; some have better-trained staff and are more efficient than others.
Working with an inefficient council can lead to extensive delays and costs that can escalate quickly out of control.
14) Finance, Insurance, and Council Rates
Consult with insurance experts to understand any specific insurance requirements or costs associated with the land. Factors such as flood insurance, fire protection, or other risks may affect insurance premiums. If you need to borrow to buy land, then consider the holding costs before completing the build. It’s harder to make bare land pay for itself unless you can rent it out for grazing animals or a campsite. Also, land sometimes doesn’t appreciate in value the same way a property does, so ask your local agent or property valuer how land in your area has performed over the last 20 years or so.
Check your Council Rates. You may think they are cheaper than they actually are. Just because you don’t have a footpath, street lighting, well-maintained roads, and council services doesn’t exempt your property from extraordinarily high Council rates. Don’t assume anything; do your homework.
15) Check Your Neighbors Out – If You Can!
Perhaps one of the most important rules is to check your neighbors out. You can build the most idyllic paradise only for it to be ruined by unsavory neighbors. You don’t need to be Inspector Clouseau, but you could camp on the site and get a feel for the area while carrying out your due diligence. Or at least ask around. For example, you may not know that the local biker gang resides down the street. You’ll be surprised where they pop up.
In Summary
It’s difficult to get all the facts when buying land, so allow some funds for your contingency. Employ the most experienced professionals you can afford, and never take your Real Estate Agent’s words as gospel; you, and only you, are responsible for your due diligence.
And never, and I mean never, assume anything!!!!!
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