Is all land buildable by default?

Question

Land newbie here - so maybe the questions is weird, but...
is all land buildable by default?
If given an opportunity to pick a fairly large lot (1+ acre in a highly populated area) for cheap, would you do so?

Jon Holdman · Answer

Absolutely not.  Various planning zoning, and environmental restrictions may limit your ability to build and specify what you can build.

Ryan M. · Answer

I would stay clear of the odd lots or parcels of land in older developments or parts of the city.  There are usually too many questions or risks.  Normally, if the parcel is quality and has entitlements and development capability, it would be developed by now.

One strategy I have used in vacant land is to buy bank owned lots in new developments that are over 60% complete.  Then I price them below the market price of the others in the development to prompt a quicker sale.  You still have to conduct due diligence and pick quality sites.

Ryan

Bill Gulley · Answer

As an example, in the early 1900s, many towns were plated with very small lots, 25' feet wide and as deep as deemed necessary for building whatever. The width was too narrow for any modern home. The number of lots in a community had to do with state benefits concerning many things like voting rights, mill (one tenth of one cent) assessments, alcohol licenses (like the number of bars in a neighborhood with at least 100 lots, something like that). Anyway, lots were plated for political reasons, not sized for any use. It may require 3 or 4 adjacent and abutting lots to build a home.

Now, these lots are functionally obsolete. Some were taken for roadway use, such as an alley to a street and abandoned. Hosues are demolished as mentioned. These residual lots will usually be abandoned by owners with taxes due and they go unsold with the municipality taking ownership.

Not knowing what a lot size might be and if it is buildable or useable from any sale could turn into a liability. Many of these lots will end up being dumps for trash, kids playing and getting hurt and other assessments that could become a personal liability to an owner, like a sewer assessment where a court could issue a judgment against someone for non-payment.

All lots are not buidable. Locally, we had a large commercial area contaminated with PCBs, and was taken by the city. Another was an abandoned rock quarry that filled with water. These areas were eventually cleaned up and today new commercial buildings arelocated there. So, with money and the right polictics a property can be redeemed and changed to a higher and more profitable use.

We also have sinkholes in this area. Several homes have been closed and acquired by the city, then demolished. The sinkhole was filled in over time and it was "determined" that there was no longer a danger and was sold with a "no building" restriction.

Many times the city can't give a property away. I have turned many of them down in the past.

I picked up one lot just for the top soil for another project and then sold it to the neighbor to add to his property. It was too small to build on.

Lots of reasons land is limited for any particular use, so do your due diligence.

You can also pick up lots for unpaid mowing bills. The city took them as they were abandoned and they had to have them mowed. Many of these were for low-moderate income housing projects.

Emilio Ramirez · Answer

There may also be deed restrictions on the lots. Many times if the city condemns and tears down a property, they will offer it for sale cheaply to the neighbors. Then after a time to anyone. This will usually come with a Deed restriction that makes the land unbuildable. You can go through a fairly simple process to lift the restriction, pay your pound of flesh and make it a buildable lot.  Maybe that is what he is doing?

Paul OConnell · Answer

He may be picking up lots he feels that the city or another governmental agency will need to buy for a future project.  Say an airport or harbor expansion, freeway expansion, or whatever.  Or it could be random landlocks parcels that is only valuable as a part of a bigger piece surrounding it.

Then he thinks he can hold out for top dollar for land he got for nothing and is paying almost $0 in carrying costs for.

Just a random guess.

Tod R. · Answer

This is a pretty tough deal.  Obviously, it will cost you taxes, insurance and maintenance yet earn no revenue.

Even if it is currently platted as a lot in an existing subdivision, there could be site issues.  In our subdivisions, there are usually a lot or two that needs significant dirt work to create a stable building pad, unusual easements or shapes that restrict the buildable area, etc.  Make sure the minimum size home can fit on the lot reasonably well.  In one subdivision in San Antonio, we had two platted lots that had an actual fault line running downt the side of them!  We were told that they were buildable but to this day, they are used as common areas for the HOA.

Good Luck!

George P. · Answer

thank you Jon
One guy in the city picks up cheap and what he calls unbuildable lots (mostly through tax sale) - perhaps I am missing something, but what's the strategy on this one?

Is all land buildable by default?

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