There is a nice trend the past few years to buy an existing home and renovate it to either make a capital gain or have a nice home to live in. However I have a feeling that we are soon going to see a shift in attitude and see people buying land in new residential areas and build. This is already done now but I think it will take off.
When buying residential land, you must ensure that the location is not only affordable for your budget but it is also liveable and have a nice environment for your needs. To determine this you need to find out about the current council zoning and their future plans if any are made up. This can determine very quickly whether the property has future potential. There is nothing worse than building a home and finding it worthless because it’s on the edge of the new industrial zone of town, or the new motorway.
Here are some things to keep in mind:
Environment and Location.
You must consider the overall standard of other properties that are in the area and think are the buildings you plan to build in cue of the one you’re planning. For example if you are planning to build a new home in an area where there are mainly older homes this may adversely affect the future investment possibilities. It is always tempting to buy a modest property in a lower socio economic area but take a step back and think about what are your needs to the property.
Site and Services.
When looking at your piece of land ensure the site lends itself to accessibility of the services and it has a range of housing design options available. For example if you buy on a steep section your building costs go up and the type of property you can build goes down. The things you need to consider are excavation, engineering, foundations, drainage, transport, landscaping and so many more. Other things is to make sure sewer, water, gas, electricity, phone and that roading, kerbs and other lighting services will be in place before you buy.
Position and Facilities.
As well as looking out for those views if any keep in mind the aspect to the sun. Where can I place my house to get the best aspect of sun? Think about the location to the local shops, schools and other public transport amenities. In the long run this will have a major effect on the saleability of your future house. If the area is new you need to investigate where and when and if new future developments that may be in the area.
When looking to buy your land make sure you understand what the title is all about. The best type for buying and selling is freehold, which is free from covenants and other ownership restrictions.
Sub divided and cross leased sections:
Residential zoning by-laws determine how many dwellings will be permitted on one site depending on the land size and the dimensions. Generally when a block of land is subdivided it is chopped up and the sections are of their own title. But sometimes you can get a cross leased section. For more information on this have a look at a previous blog post of mine on titles.
Always seek legal advice before purchasing. I only say this as it can sometimes save you a fair bit in the long run. Sometimes a lawyer will be the devil’s advocate and try and put you off a deal. Listen to their advice but remember you are your own boss when it comes to buying your section. Also make sure you get the legal title searched. This means you can find out if there are no caveats or covenants on the land, or no problems over ownership of the land for sale and no legal obstacles to building on the site.
LIM: Land Information Memorandum:
My advice is you must get one of these. It will cost you up to $200 but for the price of the section your buying it will save you a whole lot of issues. It will provide you all the known information on the land including erosion possibilities, subsidence issues, soil type, location of drains, any permits, certificates of land use and any restrictions by the department of conservation or historic trusts. Again read my blog post on LIM’s.
Buying land can be exciting, especially when you’re looking to buy land to develop a house on. Just make sure you do it right.