When purchasing land to construct a building, there is a lot that you have to prepare for. Not only do you have to prepare for the construction, but you have to prepare for the purchase of the land. U.S. News warns that there are mistakes many real estate investors make before purchasing land.
Here are three things that you need to do before you call a piece of property your own.
Have a surveyor assess the property
Before you purchase the land, make sure that you have a surveyor assess the ground to figure out the boundaries. If you buy land that has been vacant for a long time, neighbors may be using some of the lands intentionally or unintentionally.
Have an environmental test
Environmental tests are as necessary as home inspections when you buy a house—an environmental test checks for soil contamination. For example, if you purchase former auto body shop land, the soil may have contamination. An ecological test also checks for flooding potential.
Give thought to incentives
There are situations where local governments may offer tax breaks or planning approval to those who want to build on land. Incentives are common in areas where a natural disaster or other incident destroyed homes.
When there are tax incentives, you may have to act quickly. Over time, city and county ordinances can make it more challenging to build on the vacant land. Do not buy vacant land if you do not want to build on it.
It is a safe investment if you wait to purchase after you have a survey and geology report.