[This article was originally published at the Chattanooga Times Free Press]
Deciding to invest in the real estate world must be taken with caution. In order to save yourself from encountering financial nightmares, you have to consider the reports about current market trends. These are invaluable as these would serve as guides throughout the purchase process. Meanwhile, you can also gear yourself to become a thriving investor or home owner if you have the proper measures in buying land or a building lot.
The basic thing you have to be initially concerned about is to know where your finances could take you. Carefully assessing the financial obligations of owning a piece of land would give you an overview how you can successfully handle such asset. If you think you are financially capable, you have more assessment points to consider before finally buying undeveloped property.
There are two main possibilities in converting the piece of land - investment property and home building. Both options come with many considerations as well. For the first one, you have to evaluate the value of the land and whether its price plus building expenses would be easily regained from its possible yield after completion. You have to ensure that the property would give way to a positive cash flow so you can earn profit and respond to your financial obligations successfully. If you are looking at the land as the area for your new home, you have to consider the costs of home building and its construction materials. Other purposes you can turn the land into are recreation spots, vacation home and retirement area.
Its quality should be your main focus. Firstly, the characteristic of the land affects the price and value of the property. Such attribute also signals you whether you can pursue the purpose for it. There are specific regulations per locality that refer to the allowable construction in a particular zone or lot. An inspection of the land should be conducted so you can know if it is fit for what type of construction.
And along the evaluation, the inspection should include its elevation and stability of the foundation. You can also research if the area you are buying from is prone to natural calamities such as flooding. Asking local people in the neighborhood about their experiences in the area would also give you a general idea what common problems occur there.
The accessibility of the land should also be checked. Observe if there are easements, boundaries or access to main roads. You can ask from the local jurisdiction for the title insurance so you can be more assured. This document reveals the presence or absence of such access points and conditions related to the ownership and extent of the property.
You also have to look into are the utilities available with the land. It is important to examine the water supply, plumbing, septic system, drainage, electricity, telephone, cable or Internet services. Each of these utilities would cost thousands of dollars if you have to request for a connection. You have to be sure that most of these are readily available. In addition, the systems for the water, sewage and drainage should be evaluated with separate inspections. You have to check on the capacity of the deposits, sanitation and distribution.
The assistance from an experienced real estate agent should also be considered. Their guidance would be invaluable to your investment plans. Your endeavor as an investor can be fulfilled immediately with the right kind of advice. Thus, your goals to buy land and use it for whatever purpose you deem fit can be achieved in no time at all.
Get answers to questions you might have about real estate from Randy
Durham, who is president of the Chattanooga Association of Realtors and a
broker with Keller Williams Realty. His column appears on Sundays. Send
your questions to Business Editor John Vass Jr. at