Lots for Sale: Warning Signs to Look for When Purchasing Vacant or Raw Lot

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A vacant lot is sometimes overlooked by real estate investors, whether it is in the United States or other countries. But most investors failed to realize, and recognize its benefits and advantages they can get when owning a raw land or lot. The bad news is the stability and simplicity of owning a raw land far outweighs the problems that come up with owning other types of real estate properties. Some people believe that vacant lot or raw land is one of the best investments you can put your money in, there are still factors you need to consider before buying a real estate for sale.

Buying land can be complicated

On paper and the surface, land or lot is like a simple investment, but in reality, there are a lot of problems future owners will face when purchasing a real estate property. Some of these issues are not common, but the fact is, one of these problems can be a deal breaker if the people involved will not address these issues adequately.


If you consider all aspects, it will add up to a list of things that you need to investigate as part of the due diligence process. Don't get me wrong, real estate or raw land is a good investment, but you need to know everything about this business, remember all the circumstances, and adjust your offer price depending on the factors and characteristic of the land.

Zoning on the property

The first thing you need to know is how vital zoning on the property, and to determine how will you use the raw land or the property. With just a simple phone call, you can call the planning and zoning department in your area. They can give you all the answers to your questions regarding zoning on the property.

Once you have an idea on zoning classifications like residential, commercial, mixed-use or agricultural, you can ask them to give you some examples of establishment that are allowed to be built on that property under the zoning qualifications. They can also give you some ideas on what you can put on your land that you hadn't thought of.

(If you don’t have an idea on what is zoning on the property is, you can visit https://people.uwec.edu/ivogeler/w270/what_is_zoning.htm to know more.)

The Topography of the Property

If you are buying a real estate property, you need to know the topography of the area. There are places all over the world that have different elevations: cliffs, valleys, mountains or ravines. In most cases, the topography of the area will have an impact on how the structure is built on the property. It is also the reason why you don't build a house on a 90-degree cliff.

You need to research where your property is located, and what is the lay of the land you are planning to buy. The best way to check the topography of the area is to use Google Earth or Earth Point. It is easy to use and free. If you are using Google Earth, you can search the lot using the address, and zoom in using the mouse wheel on your computer. You can also tilt the earth to see the mountains and the hills in the area, using the control and shift keys on your computer.

Annual Tax Obligation

If you are planning to hold onto a real estate property for a long time, you need to know that there is a high tax bill related to the value of the property. It is not a common issue, but for specific reasons, some real estate properties are subjected to a ridiculous amount of taxes, in proportion to the actual price of the property. In most cases, 1% to 4% is a reasonable annual tax bill for the real estate property's full market price.

(Click here to know how to compute annual tax obligations on your real estate properties.)

Required Building Setbacks

You need to know the exact dimension of the piece of land that you are planning to buy. You then call the zoning department in your area and ask them what the possible building setbacks for the property in question are. If you take these into account, the regulations and delays, is there enough room something worthwhile, or does the drawback will render the land useless? Some properties were designed, whether it is intentional or not, to be too small. After you factor the setbacks, you found out that you can't build anything on them, leaving the property you just acquired, useless.

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