Real Estate

You‘ll want answers to questions like those above and county officials such as planning and zoning, community development and building departments are a good place to start. I would also call utility companies about water, sewer, electric and phone, and talk to neighbors, contractors, developers, real estate agents, appraisers and a local surveyor to have some of the more important questions addressed at the beginning of my search. I wouldn’t rely on the sellers to be all-knowing, either.

Again, planning and zoning departments can offer the following: Maps of existing uses, forecasts of future development, lists of planned new roads, utility extensions, locations of planned waste disposal facilities, details on environmental areas and future land uses. They also regulate building codes, curb-cut permits, historic preservation, housing codes, subdivision regulations, tree cutting and zoning laws. They usually have aerial photographs and plat maps that can help you to better identify and evaluate the land in question.

Do you already have your location identified? Will it be in the east where the weather is often wet and humid or out west where it is predominantly arid and dry? Will you be living in cold weather in the north or gravitating towards the southern hemisphere? Concerning location, what are you least comfortable with: Avalanches, landslides, earthquakes, flooding, hurricanes, tornados, tsunamis, volcanoes and/or wildfires? You may want to investigate areas of interest by going to websites like http://www.officialcitysites. You will get a better picture of what awaits you concerning it’s economy, environment, population, recreation, educational, medical and employment facilities to name a few.

Let’s assume you know where you want to buy this land, why you want to buy it, and how and when you will use it once you have it. The following general observations, ideas and information may help you to further investigate the alternatives that are available to you in your endeavor to find the land of your dreams.

Raw land is unimproved property; it has no utilities, sewers, streets or structures and usually must be cleared.

Here are (or can be) a few drawbacks that are sometimes associated with raw land: Negative cash flow; usually the land does not generate any income while you pay the principle, interest, taxes and costs of development. Tax advantages are scanty as land cannot be depreciated. Generally, raw land is considered a long-term ill-liquid investment that often takes time before gains can be realized. Risk of loss on resale can occur if you choose poorly, fail to evaluate and negotiate properly, the economy slips or various other unforeseen events occur. It is difficult to obtain traditional financing on or borrow against accrued equity.

Here are some possible benefits to raw land: Land has the potential to experience tremendous appreciation if bought in the way of growth, or if a higher and better use can be achieved. Owner financing can often be obtained through the seller at below-market rates. Subdividing can create added value and provide for immediate returns. Privacy and pride of ownership can provide a secure feeling to the holder.

What is considered good and bad land?

The worst you can buy is swamp or marshland. Most often flat land is the least expensive to develop and the most desired for building purposes. Land with barren rock will increase costs and virtually eliminate a basement just the same as a high water table.

Note: Loamy soil, which consists of a balanced mixture of clay, sand and some organic matter, appears rich and dark in color and is considered ideal for most purposes. As opposed to good soil, you don’t want hard cracking ground when dry and sticky soil when wet. Warning! Check with your state offices for the presence of expansive soils; this stuff cracks foundations in the most insidious ways, leading many to ruin.

Many people are literally being driven to the hills. Granted the views can be spectacular but roads, utilities, water, sewer, and foundations, such as pilings, can add 25-30% to building costs alone, further adding to this already expensive proposition. When considering going vertical, an 8-degree slope is about the limit when concerning building economically on hillsides.

Plots with trees, a view, rectangular in shape, a gentle slope or none and a good location are most often preferred, and streams can boost values by 100% in some cases.

How to determine the value of raw land

Using the appraisers standard view of estimating value can give us some clues, so let’s look at what appraisers do! Site size and shape, represented by frontage, width and depth. Corner influence equals visibility for commercial, or privacy for residential. Plottage, has assembly or combining of parcels been accomplished. How much land is excess or surplus; surplus has less value than what is required. Topography: Land’s contour, grading, natural drainage, soil, view and usefulness Utilities: Sewers, drinking water, natural gas, electric, telephone, cable, etc. Site improvements: Landscaping, fences, gutters, walks, drives and irrigation Accessibility: Parking, location, streets, alleys, connecting roads and highways Environment: Climate, adequate water supply, air quality, streams, rivers, lakes, oceans and the absence of any hazardous materials

An old timer once gave me this advice: He said, “Dan, always try to buy land that is located as close to those amenities that an area is famous for, as that is often the reason people come to certain areas. He lived in Florida and had plenty of beachfront property located in tourist areas, which clearly illustrated his point.

Who has this raw land and how do we find it?

You may start your search by contacting farmers, investors, real estate agents, state and federal agencies, cities with odd lots they need to put back on their tax rolls, bureaus of land management, federal marshals, tax sales, bank foreclosures, developers, property heirs, the elderly, and family and friends. Use your networks and birddogs while driving areas of interest looking for further opportunities to buy.

Dan Auito

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