Have you always wanted to design your dream home at a location of your choosing? If so, buying a plot of land to build your customized home on is probably your best option. Before getting started, you'll want to do your due diligence to ensure you're making a smart investment.
Find a Property to Build on
The concept of customizing your home is an ideal one, but the reality of finding the perfect plot isn’t so simple. You can check listings, but there are several other ways to find ready-to-build-on land.
If you find land approved but not yet suitable for build, you’ll also want to take clearing and grading the land into consideration.
Understand Local Zoning Laws
Some municipalities are stringent about how land can be used. Before you buy, it’s critically important to understand local building restrictions and zoning criteria. Any number of scenarios might prevent you from building your home. Here are just a few.
Be certain to understand every possible building restriction or zoning requirement before you purchase land. It would be disastrous to discover you can’t build your dream home the way you planned.
Does the land meet local criteria or have the right terrain for these necessities to be installed? Utility hookups are a detail you don't want to overlook—ensure you'll have access to water, sewer, electricity, natural gas and Internet. If no public water or sewer lines exist, you’ll need to learn about wells and septic tanks.
Understanding the Financials of Buying Land
Obtaining funding to buy land is a little different than taking out a mortgage to buy an already existing home. You’ll typically have a few options including paying in cash or getting a loan. Types of loans include land or lot loans, construction loans and seller-backed loans.
These loans are usually short-term and involve high-interest rates because lenders generally perceive land purchases a riskier gamble than home purchases. As with any major purchase, carefully evaluate your financial situation and consider future expenses and other contingencies before committing to a loan to purchase land.
Building your home on a plot of land takes additional planning because there are numerous details to explore before you can even begin to get started. While building a home is a more complicated process than buying an existing one, customizing a new home is a far more fulfilling investment for many people.