Buyers must know important questions to ask when buying land to maximize their investment. No investment is risk-free. You need to do your due diligence before making a deal.
Are you thinking of investing into a rural property? We believe it is worth it and would help you diversify your investments as well as hold real assets.
What are the risks?
Whether you pick The Beaver State, Florida, Tennessee, or the world-famous Grand Canyon State, there are plenty of locations and sources to find land for sale. You may just look through land listing sites and pick a few acres of land in a perfect location.
Vacant land may appear like a perfect deal when you visit it yourself. But it is crucial to ask some questions before purchasing the property. It is important for potential buyers to perform due diligence before buying a piece of land. It assures you to acquire the right parcel of land, for the purpose intended.
When looking for a piece of land or property, buyers must understand that each rural land differs, and its cost will vary according to location, uses, and other factors. If you desire to secure your first or another land investment, read all the questions you may want to ask when buying land we have mentioned below.
What is the Chain of Title?
In simple words, the Chain of Title is the hierarchy of past transfers of title to a property. It gives information about the historical ownership timeline of the property. Potential buyers can use the Chain of Title to find about the previous owners of the property, easements, and other restrictions.
Nonetheless, land buyers often overlook checking whether the seller is the true owner of the land. There is always a chance that the previous owner did not clearly give the ownership of land to the seller, or the seller is intentionally trying to sell the land he/she doesn’t own.
To ensure the land you want to purchase has a proper title chain and reap all the benefits of land ownership, ask the seller to provide you a copy of the deed. If they do not have it prepared, check the deed history with the county.
What can you do with the land you intend to buy?
Although vacant land can be used for different purposes, buyers must be aware of zoning and HOA/POA restrictions. Vacant land is commonly classified as residential, recreational, and undeveloped. It is crucial to find out restrictions on the land to determine what you can use the piece of land for.
It is advised to buy land that is zoned so that it suits your needs. Unlike land planning and land use where people adapt a vacant land to fit their certain needs, Zoning is about the allocation and categorization of land into different zones to keep a commercial district commercial and residential district residential.
It is crucial to reach out to the Planning and Zoning Department to get accurate and authentic information about the land you’re thinking of buying. Every state and county is different and the zoning in one jurisdiction may not allow the same thing in another.
Land zoned for recreation would be suitable for camping, hunting, fishing, and other recreational activities. While residential land will be suitable for buyers who want to build the house of their dreams.
Are there any conservation easements on the property?
A conservation easement is an agreement that dictates the specific amount of land that can not be developed and allows a government agency or local land trust to oversee it. Landowners often establish conservation easements to reap tax benefits.
Usually, conservation easements are permanent and prevent owners from doing certain activities on specific areas of land, such as clearing, hunting, and planting to preserve natural resources.
If you are thinking of buying land for farming or hunting or developing it for any other purpose, verify with the county or city to ensure there aren’t any conservation easements on the land. In case you decide to buy a property with a conservation easement, don’t forget to ask how the easement affects the land.
What are property back taxes and zoning?
Property back taxes are partially or fully unpaid taxes a potential land buyer must know about. It ensures that a buyer does not need to pay extra costs to get ownership of a property.
What utilities are available or needed to add to the property?
Vacant and rural properties don’t always come with all the essential utilities, such as water, electricity, sewer system, etc. Before you purchase, do your due diligence on utilities that are either on the property or what it takes to get it to the property.
If you are into off-grid property and privacy, we recommend utilizing natural resources. Those who are planning to buy land in a rural area can rely on solar energy and preserve rainwater to diminish costs.
If you have got the land closer to the city, the chances are that you will get all the utilities with the property. In case you need to find property utility information such as road access, boundaries of the land you are looking at, County’s GIS maps, and etc. It is always a good idea to call the utility service provider.
Apart from that, there are several questions you should ask the seller of land and verify with the county or city, such as:
- Any tree cutting or land clearing restrictions?
- What are the required permits and fees for your intended use?
- Are there any restrictions due to water frontage, steep slopes, wetlands, historical or cultural sites, floodplains, endangered species, or other issues?
- Are there any laws that affect your intended use?
- Will roads need to be constructed to reach the property?
- What are the annual property taxes?
- Who owns the minerals rights?
Bottom Line: Ask questions/ do your due diligence
Those were some of the important questions every buyer must ask before buying land. Whether you’re investing in real estate for the first time or buying your first rural land, having answers to those questions will increase the possibility of your investment being successful. Once you find the answers to all of these questions, you are ready to buy the property of your dreams.