Buying Land to Build a Home

Can’t decide between buying land that already has a house on it or buying land and building from scratch? It helps to know what to expect when you buy land to build a house, particularly the various factors that impact how complicated (and how costly) such an endeavor might be. 

Read on for our top tips on buying land for a new build, including the relevant factors you’ll need to keep in mind before you go all in on your investment. 

Benefits of Buying Land to Build a New Home

There are all sorts of reasons to buy vacant land for the purpose of building a new home. Whether they outweigh the work and expense that goes into the process is up to you, and requires a careful balancing of the benefits and drawbacks of this type of land purchase. 

So what are these benefits? 

• Customization: Building from scratch ensures you get a home that suits your specifications, from size and layout to flooring, fixtures, and materials. 
• Budget Control: While building a new home certainly isn’t cheap, you do have a lot of say over where and how you spend your money, plus the ability to make targeted adjustments if your expenses are getting too high. 
• Less Competition: There are fewer buyers for vacant land versus pre-built homes, meaning less stress, less competition, and less risk of overspending on your property. 

Building a house on vacant land can be incredibly rewarding. To make the most of it though, you’ll need to be careful about the kind of land you purchase and how it works with your needs. And that’s where the following tips come in. 

Top Tips for Buying Vacant Land for New Home Construction

Purchasing the wrong piece of land can add a tremendous amount of work to your new home build. Here’s how to avoid it. 

Tip #1: Look at Zoning Requirements

The ability to construct a custom home is one of the main reasons people build on vacant land. Yet there are some limitations you’ll need to keep in mind, especially when it comes to zoning and use regulations. In particular, zoning rules may limit how close to the road you can build, how tall your house can be, and whether you can build a fence around your property, among other notable features.

Tip #2: Consider the Slope of the Property

Land on a significant incline adds complexity and cost to a new build. This is due to factors related to excavation, drainage, and design, with retaining walls alone costing upwards of $6,000. It also poses a risk to the structure of your home. As a rule of thumb, look for land that slopes no more than 20% if you’re buying to build. 

Tip #3: Check for Access to Utilities

Electricity and running water are standard utilities for a new home build, but not all parts of the country are equally developed. You may have some issues getting a sewer line, water, or electricity out to where you plan to build your house, so verify these are possible (and what they’ll cost) prior to closing on the deal. 

Tip #4: Talk to Your Lender

If you are planning to take out a loan to build on land, talk to your lender about the specific process first. The requirements for a loan may change depending on where you build, and some lenders may have restrictions or added costs you’ll need to be aware of. Keep in mind that you are more likely to get a loan for building on vacant land if a property has easy access to a roadway and there are other houses in the area. 

Tip #5 Factor in the Surrounding Area

Whether or not a parcel of land is a good investment for a build depends as much on the surrounding area as the property itself. So in addition to thinking about how your house will look on the land and what you’ll do with the yard space, consider proximity to neighbors, how long your commute will be, and comps in the neighborhood, all of which impact the total value of your buy. 

Tip #6: Learn the Local Hazards

The risk of bushfires, flooding, hurricanes, and other hazards may not be apparent right away. It helps to talk to someone who is familiar with the area and who can give you an unbiased report of what kind of dangers you should be aware of before you build. These natural catastrophe risks don’t necessarily mean that you have to find somewhere else to construct your house, but may require that you make some modifications to your building plans. 

Key Takeaways

Purchasing land to build on is an exciting prospect. But before you construct the home of your dreams, you need to take all relevant factors into account. Things like zoning requirements, regional hazards, and the degree of slope on the property should all be considered, and will have a large impact not just on whether a new build is possible but how much it will cost. 

Ready to find that perfect property for your new home? Call The Pikoff Team - Keller Williams Preferred [Powered by PLACE] at (832) 793-7860 and put my years of experience, and my real estate Broker license and Lawyer license to work for you.