There are a couple lots near my Dad's house that were foreclosed on by a bank. It seems like lots in the area typically spend months on the market.
I know for houses banks typically have a formula where they expect to get pretty close to asking price. Is it similar for land if they have it on the market?
I don't think the current property values in the area would support developing the land. However it could have a pay-off in the long-run if the purchase price is right.
@Jesse T. - Im sure that some people are able to make money on lots, but you really need to know what you are doing. In a very desirable area where land is scarce, it may be a good move. You need to figure out what the city/county regulations on developemt are. Also, what do the comunity covenants say? What are you allowed to build in the neighborhood? If it were really appealing I woud imagine that a local builder would have scooped up the lots already...
Cost to build new is typically more expensive that buying existing due to economies of scale....
@Justin Tahilramani is correct. It depends A LOT on city/county and how many building permits are being issued for said services. NOW that said, if there is already water sewer and electricity to each lot and some houses already built on some of the lots, that is a slightly different story.
The second down side is the 50% LTV on empty land lots. The banks think it is risky and you should consider it the same.
Hope this helps and let us know what you find out about the area.
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