What should I know before buy land to build ??

6 Replies

@Donovan Castaneda before looking at land, talk to some builders or architects who you'd be working with about the type of building you'd like to build.  I'm in the beginning stages of looking at a new build strategy with a partner for single family homes (possibly for sale, possibly to hold and rent, we'll have to run the numbers even more to see where they fall).  We haven't yet gone in to meet with the builder, but I've talked with them extensively on the phone to get some ballpark ideas.  The next step will be to go in and have a sit down meeting to run through the numbers and complexities all before we start even looking at lots to buy.  Things like zoning, required minimum set backs, environmental features, minimum square footage, and many more things can impact or even prevent building what you want.  In my area there are some 'lots' that are no longer even buildable without buying two and joining them together due to changing zoning laws since they were subdivided. (a 50' wide lot somewhere that requires a 20' side setback would leave you with a 10' wide sliver to build on).  In other areas of beautiful and cheap land, there are groundwater contamination zones in certain places due to chemicals used in the 70s and before on golf courses and nurseries.  They are rural enough not to have public water, and typically well and septic together is about $10k.  The builder clued me in that building on those lots is fine, but the wells required in those zones are $10-12k more and require state testing and oversight, oftentimes filters and ongoing testing...and then disclosure to buyers of the groundwater contamination.  Its not impossible, but spending $10-12k on a better or bigger lot somewhere without contaminated groundwater would be a much better move.

If you already own the land, then it's an issue of finding highest and best use of the land you've got.  Planning to buy a lot and build allows some due diligence on the front end to avoid a lot of challenges.  I'm in Central Florida so my area is likely different.  But I'm sure everywhere in the country has specific zoning and environmental factors to consider.  Then there are impact fees, utility connection fees, etc. that can vary county by county and often even within different regions within the county.  Knowing about them all before buying the lot is the way to go! 

@Donovan Castaneda you're welcome! I was able to find quite a bit of zoning info by researching on the county websites in my area. Each would have a large 40-60pg PDF file with zoning guidelines that typically had some tables for allowed used and setbacks. It's much easier to find land zoned for what you want than to try and change zoning. More specific questions on subdividing lots I've gotten answers by going in to the building departments. But then I've found even more by talking with builders. (Like the groundwater issue). I can then find the groundwater areas online but never thought of that. A builder who builds in the area will have dealt with those things and will know what to watch out for. I'll know more once we have a sit down with the builder, but thought I'd share some of what I've learned so far!

@Russell Holmes if the lots were buildable when they were platted then they are still buildable. Governing agencies cannot just change the setback, lot size FAR ratios, etc. and other requirements and deem the land no longer buildable. I run into this all the time. Usually those requirements are for new plats or when subdividing raw land. The Bert Harris act addresses this, mostly for land you already own, but some aspects touch on the original platting and what the requirements were at that time, and that protects the land value.

@Michael Gravallese that's interesting! I'll have to keep that in mind and it makes sense. It hadn't happened to me personally, but when I went in to find out specifics on lots, lot splits, and other guidelines from Lake County they mentioned it as a potentially negative scenario that could come up if buying single lots to build. It was in the general sense of 'don't assume a lot is buildable just because the listing says so'. These were undeveloped raw lots on the small 0.15-0.2 acre size. But without being prevented from building personally I'm not sure how accurate that was. Also could be in reference to buying a single parcel that is legally described as several "lots" not actually being able to be divided into that many now since it wasn't subdivided previously.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here