Should I buy the land next door?

[Cesar Valencia]

Hello, If I have the opportunity to purchase the land next door to my house should I do it?

1. 1.What are the steps to "combine" that piece of land and my property? How do you go about doing that?
2. 2.How much will a piece of land help in my appraisal value once I do successfully merge the land and my property?
3. 3.Is it even worth the trouble?

I currently own a property in North Chattanooga and the land was divided a few years ago. The empty lot would be a challenge for anyone to make use of, including myself. Let me know what you think!

[John Teachout]

In my experience, not purchase adjoining property when there's an opportunity almost always leads to later regret. This applies to your residence, not rental houses. There doesn't need to be a "use" for it, it keeps someone else from using it and gives you some "buffer" which is nice in most cases. (unless you like having nearby neighbors)

[Bruce Woodruff]

Depends on price? If it's pretty cheap just snatch it up. If it's pricey it had better have a potential use - subdivide it, build more houses on it, etc.....

[Cesar Valencia]

Quote from @John Teachout:

In my experience, not purchase adjoining property when there's an opportunity almost always leads to later regret. This applies to your residence, not rental houses. There doesn't need to be a "use" for it, it keeps someone else from using it and gives you some "buffer" which is nice in most cases. (unless you like having nearby neighbors)

 Thanks for the input John. 

[Cesar Valencia]

Quote from @Bruce Woodruff:

Depends on price? If it's pretty cheap just snatch it up. If it's pricey it had better have a potential use - subdivide it, build more houses on it, etc.....

 The price is $150k and it is essentially unusable land for anyone but myself or my neighbor really. I guess someone who really wanted to be on our street would make it work, but it would cost a lot to do anything with it.

[Nicholas Misch]

It's probably more nuanced then we can fully understand, but I always think that no more land can be made, so any opportunity to buy more sounds like a plus. If it can be made part of your current land that will increase the value of it, and I can't imagine that there isn't something that can be done with it unless its swamp (even then someone smarter then me could figure it out). 

[Bruce Woodruff]

How much acreage is it, and is that in keeping with prices for raw land in your area? My initial thought is pass.....

[Cesar Valencia]

Quote from @Nicholas Misch:

It's probably more nuanced then we can fully understand, but I always think that no more land can be made, so any opportunity to buy more sounds like a plus. If it can be made part of your current land that will increase the value of it, and I can't imagine that there isn't something that can be done with it unless its swamp (even then someone smarter then me could figure it out). 

 Thats a good point. It's not swamp but the grade will be difficult to work with.

[Cesar Valencia]

Quote from @Bruce Woodruff:

How much acreage is it, and is that in keeping with prices for raw land in your area? My initial thought is pass.....

 I believe its .17 acres.

[John Teachout]

That price seems really high for that small of a lot. Do you know what current zoning requires for building? (mandatory lot size)

If someone did build on it, would that significantly impact your situation?

[Cesar Valencia]

Quote from @John Teachout:

That price seems really high for that small of a lot. Do you know what current zoning requires for building? (mandatory lot size)

If someone did build on it, would that significantly impact your situation?

 Thats an interesting suggestion. I'll have to look into that.

[Carissa Trent]

As Chattanooga continues to grow as a sought-after market, having a larger piece of land is a great selling aspect of the property. Even if it is "unusable", land always has use for someone somewhere. You want to be the person to offer that opportunity and benefit from it.

[Cesar Valencia]

Quote from @Carissa Trent:

As Chattanooga continues to grow as a sought-after market, having a larger piece of land is a great selling aspect of the property. Even if it is "unusable", land always has use for someone somewhere. You want to be the person to offer that opportunity and benefit from it.

 That is true. The challenge I'm having is, assuming he won't let it go for less thank his current asking price of 125k (updated), I can';t think of a way to make that money back before the sale of the property. Basically with those same funds I can purchase a property and be cashflowing within 3 months instead of having it siting there. However, I do see the long term value of the land especially when the sale of the current property comes into play.

[Jonathan Rogers]

My guess is the lot you are on is similar in topography as to the one for sale.  The lots in N Chatt are steep and sometimes difficult to build on, but it can easily be done.  You just have know your costs.  It will sell and something will be built as the NP school zone is highly sought after and quickly running out of land.  It all depends on your longterm goals.  If immediate cash flow is of highest importance, then I wouldn't do it.  I had the opportunity to buy a house (double lot) across from my personal residence.  I would have much preferred the older, smaller ranch home to the ugly new build, but it wasn't worth the $$$ required to preserve my view.  I'd rank what's important and work from there.  

[Jason Andler]

@Cesar Valencia

Without knowing your market I agree with the other that it seems like a lot for that small of a lot. Seems like the market agrees with that sentiment since it's not selling and he has dropped his price by 25k. I'd say to figure out what it's worth to you and offer that. Even if it's just 40k. If it's declined just tell him to contact you if he ever changes his mind.

If your assumption is correct in that it would be useless for anyone other than your or your neighbor, then you don't need to worry about. Just let it sit. If someone does build there how much will it bother you? How long do you plan to stay in your current house?

If the other alternative is to buy cash flowing assets and your goal is to obtain cash flowing assets... buy cash flowing assets.

Your first question of combining it.. if you do purchase don't. When you sell in the future you might be able to get more by selling the lots separately, or it could be more attractive for someone to buy both lots and sell off the lot themselves. I think more flexibility is always a plus.