When it comes to purchasing a plot of land or unimproved property, it may sound like a great opportunity for investment. Buying unimproved property is a chance to have a blank slate to create whatever you want. Whether you’re looking for residential, commercial, or investment opportunities, buying unimproved land can come with its own set of benefits and challenges. So if you’re considering making the purchase, here’s what you need to know:
What is Unimproved Property vs. Improved Property?
Unimproved property is land that currently lacks utilities such as electricity, water, telephone, and in some cases road access. Oftentimes, unimproved land are large, open plots of land that can be used for farming or residential or commercial construction opportunities. Building on unimproved land requires various zoning, easements and other permits. Due to the lack of services, unimproved property is a cost-effective option for purchasing property for your future home, business, or farm.
Improved land refers to land that has utilities and services readily available. These plots have zoning laws in place to control what is and isn’t built on the land and how it can be used. Improved land is more expensive than unimproved property due to its higher earning potential.
Do’s and Don’ts of Purchasing Unimproved Land
Do Pick a Good Location
When it comes to purchasing any land or even a home, location is the most important aspect of the decision. Location will dictate the resale value as well as what the land can be used for. If the land is completely isolated it may not be a wise decision for a business investment.
For residential purchasing, you should explore the areas where you would like to live. When purchasing land to build a home, you should consider the access to work, schools, and grocery shopping to name a few. This means that you’re not only shopping for land to live, you’re also shopping for the community look and feel.
Don’t Skip a Land Survey
A land survey is used to establish the exact property boundaries of the vacant lot. Not only will this remove the headache of where your property lies when dealing with easements, but it will also help you plan out the dimensions for your future home. The cost of the survey is determined by the size of the property, the time it takes to complete, and how much research the professional surveyor has to do with the property boundaries on the map.
Do Establish Easements
An easement is the right to enter or use another person’s property for a specified purpose without possessing it. For example, if you purchase a home that has no direct public road access, but the only way to access the property is by using the private road built by your neighbor, an easement would allow you to use the road to get to and from your home. Easements can be tricky and can vary depending on the situation. We recommend consulting with one of Greater Nashville Title’s real estate lawyers to determine the easement conditions and laying out the negotiation for both you and your neighbor to agree to.
Don’t Forget Your Permit
When building on unimproved property, you’re going to need permits for just about everything. From zoning laws to construction permits, you will need permits in order to protect the land and ensure that your structure is safe. You will apply for various permits throughout the construction process, but rest assured that once all of the paperwork is completed you will have a safe legal investment.
Do Understand the Costs
Real Estate is an expensive investment and while unimproved property may have a lower initial cost, it comes with its own list of necessary expenses. From land surveys, utilities, building costs, zoning restrictions, and permits – the list of costs goes on. While these costs may seem overwhelming, purchasing and building land provides you with the opportunity to create whatever you please.
Don’t Skip the Property Title Search
Title searches and title insurance will protect you from any past defects associated with the land’s title. This will protect you from any liens, encumbrances and other legal complications associated with the property. Before investing in land, we recommend conducting a title search on the property to determine its history. When performing a title search, we will help you determine any defects and provide solutions for how to fix them before the property is yours.
Middle Tennessee’s Real Estate and Title Insurance Experts
At Greater Nashville Title, we are proud to provide real estate title expertise throughout Middle Tennessee. If you’re looking to purchase unimproved property or would like to know more about the process – we are here to help!