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Sunday, 2 December 2018

How to buy land, all over the world.

How to buy land, all over the world.

Land procurement is a form of property investment that is often overlooked and can produce good returns. 

Land is a fairly hand- out investment but it is more important than rental property to generate returns. This is because research, assessment and firm profit strategy are necessary for the purchase of land.

 4 stages to buying land and successfully profiting from it, here is that:

Step 1. Locate Land to Buy, where to buy

The first step is to simply find a good piece of land for purchase. Immobilizers, land brokers, online sites, properties for sale by owners, auction companies and government agencies holding surplus properties may also be involved in property searches.

Find some Real Estate Agents to buy land

Immobilien brokers and their agents have access to the largest selling property, including raw land. Indeed, only 8% of property sales are for sale by owner, according to the National Association of Realtors, which means that more than anybody else is listed by real estate agencies.

 Every immobilization office has access to one or more multi- listing services( MLS) that include all properties to be sold by the different MLS agencies.
The disadvantage of searching property with an agent is that the seller has agreed to pay a sales commission reflecting the price. 

In effect, therefore, the commission makes the demanded land price perhaps 3% to 5% higher than an alternative that is available without an agent. Please note that prices for land are generally negotiable so that with good negotiation you can overcome the higher demanding price.
In addition, be aware that not every immobilizer or even courier is subject to property sales. So, make sure you work with a land sales agent and office.

Land Brokers to buy land

Although not each immobilization agency in the neighborhood knows about land deals, specialized immobilier agencies are very familiar as property brokers because this is all they do. 

In rural and agricultural areas you will usually find land brokers and they will be familiar with the parcel specifics and physical properties of the parcels, information about the survey and uses.
The commissions of land brokers tend to be somewhat higher than those of typical residential immobilization agencies, with commissions of   7% -10% more. Land is more difficult to sell and the Commission prices for these agencies their work. Once again, as a purchaser, good negotiation can reduce the effect of commissions.

Buy Land From Online Sites

You have plenty of possibilities to search online. In virtually every state and community, Craigslist has land listed. 

Websites such as Zillow and Trulia are great sources of lot and raw grounds online real estate. In addition, land brokers like Land and Farm can offer a wealth of potential dealings in online equivalents.

Buy Land From Sale By Owner

A lot of land is sold by its owner directly. You probably have seen any kind of sign advertising a piece of land for sale, if you have ever driven to less developed areas in the city or more rural areas. For sale by owner( FSBO), the sites often contain many parcels that can be developed and rural land.

Buy Land from Auction Website:

An auction is a very common way of selling land. Land sales are actually one of the most frequently handled by the auction companies! Local auction companies with Google searching like "Chicago Auctioneer" and "Chicago Auctioneer" are available. Local auctions may hold auction sites live or via their own online auction sites.
National online auction sites are also a good way to find land for purchase. eBay has a large amount of land on sale at any given time in its real estate section. Other national auction sites such as Bid4Assets are also very useful in finding land and auction lots.

 Buy Land from Government Owned Land

Many government agencies can sell land. Usually, your inventory takes two forms. Firstly, there are surplus land owned but no longer needed by local, state and federal authorities. The other is because people do not pay property taxes and goods are sold on tax and tax deeds.

Evaluate the Land Purchase when you buy Land

Because of their price, land deals can be attractive. Unseen buyers are often drawn by fantastic dealings on lots, literally only costing a few hundred dollars, or promoted by shady dealers as "can't lose" investments. Get ready to investigate possible acquisitions carefully before you finally buy a piece of dirt that's only good for keeping the earth together! 


the areas to investigate before you buy a piece of land are:

  1. Deed and Ownership History
  2. Property Taxes
  3. Zoning and Potential Zoning Issues
  4. Physical Characteristics of the Parcel
  5. Usage Restrictions and Building Requirements
  6. Availability of Utilities
  7. Property Survey and Plat Maps

Research the Deed and Land Ownership History

Claims of ownership of vacant land could be more relevant than property constructed on. Because a built- in property has probably already been searched for titles and any links or ownership claims resolved.
Former legal searches on vacant land are often not the case. Many parties may find legitimate claims on an inheritance, servings or donations to a parcel. Sometimes unregistered claims come from the timberwork, but they may eventually be justified.
When you plan to purchase land, always pay for a thorough search for title and obtain title insurance when shopping.

 This can be carried out by an office in title, escrow, or immovable law. They will reveal those who have claims or are liable against the property. If a non- predictable claim is disclosed, the purchase of title insurance will protect your interest in the property.

Research the Property Taxes on Land

When you purchase land, taxes are the only ongoing charge you have to pay apart from a mortgage. So you still have to pay annual property taxes, even if you pay cash for the plot.
Be assured that you are aware of the amount of tax before you buy. Property taxes are minimal in some regions of the country— especially rural areas.

 However, taxes are high and can run almost as much in densely populated urban or suburban areas, such as New York, Boston or Los Angeles, as in less costly markets.

Research the Zoning and Potential Zoning Issues of Land

Each parcel of land shall have a certain designation of zoning, often defined by a number of letters and/or numbers that are uniquely local. Zoning limits the use of a property and what can be constructed on the parcel.

Zoning Types

In this area, there are several zoning categories, each individually for the type of use and the user allowed. Last but not least Zoning limits the types, the functions and even the density of buildings which can be built.

 Although zoning appointments differ across the country, the main categories are quite similar. The most frequent are:

  1. Residential – this form of zoning usually allows for single-family homes
  2. Multi-family – this zoning will allow for single-family homes along with duplexes, triplexes, and other multi-unit properties as well as apartments
  3. Commercial – permits office buildings, retail, and sometimes hotels
  4. Industrial – generally reserved for warehouses, factories, and light manufacturing
  5. Agricultural – for farms, orchards, ranches and similar. Single-family homes and small multi-units like duplexes are sometimes allowed with this zoning.

Rezoning Concerns When You Buy Land

One thing that needs attention when purchasing land is pending changes in zoning. Zoning changes can reduce( or increase) desirability of land. 

However, rezoning always affects what you can do with the land, and often this can be expensive. You may be thwarting your plans if, for example, you intend to build a single family home on many areas of land, but the county reflects it as an industrial land. 

Similarly, you will have to carry out an alternative project if a area is zoned in for light commercial applications and you plan to establish a small retail centre, but then the land is residential.

Research the Physical Characteristics of the Land

Though it should seem easy to buy a piece of land, many areas have to be taken into account. If you are not careful, you can easily buy a piece of land that is worthless or almost worthless. 

These are areas to be taken in considering when assessing the physical characteristics of a purchase of land:

  1.  Landlocked Parcels– landlocked means that a plot is fully surrounded by other properties that have no access, such as the driveway. 
  2. No road access– a parcel which has no road access is similar to the above. For more intensive uses such as commercial or industrial zoning this is particularly important.
  3. Flood Zones– a large quantity of land is unbuilt since it is in the flood zone. If it's, you can never build on it, or if you can, it can't be insured.
  4.  Environmental issues– a wide range of environmental potential issues range from a wetland- protected area to a former junkyard. Check your premises

Research Usage Restrictions and Building Requirements for Vacant Land

Zoning and other restrictions will often control what a piece of land can and can not do. There are some very important considerations to examine concerning the restrictions on construction and use: 

  1. Building moratoria– make sure you are able to build on the purchase lot. In many areas of the country, moratoria are imposed on building.
  2. Easements– land has occasionally been designated for what can be done with some sort of easement. Examples include wildlife and historic facilities for conservation which can prevent further development. 
  3. Inappropriate parcel size and shape– ensure that the parcel is large enough to build on. 
  4. Make sure that the shape of the building or development that you plan to build naturally.
  5.  Setbacks- Many local areas indicate the background of a building, but many lots do not conform.

Research Utility Availability and Options before Buying of Land

The availability or lack of availability of services is one of the most basic, but complex factors associated with the purchase of raw land. If there are no services at the lot, either you will have to take them to the lot line( which is expensive) or you will have to use other heating gas options such as bottles if there is no gas line.

Investigate What Utilities Are Available Before Buying a Land

Start by determining which services are on or near the site. You're looking for:

  1.  water– if the city's water isn't running, you have to find out if it is possible to dig a well. 
  2. Sewer– if the municipal sewer is not available a percolation test( perc) must be carried out to see whether the plot has a septic tank. In most cases, the sewer is not water free. If you're not going to get a build permit, you probably can't.
  3. electricity– if you are nearby, but not yet at the lot, electricity is one of the easiest services to operate a lot. Carefully check the cost of running a line with your local electricity company if it is not already present.
  4.  Gas( flexible)–luckily it doesn't necessarily need gas if a lot has electricity. However, if gas is the custom in the area, then the gas supplier will check the cost to run one route to the lot. 
  5. Telephone, communication and internet( optional)– the absence of telephone, cable television or internet lines will not prevent you from building, but it will certainly not be acceptable for someone planning or working on a farm.

Research Surveys and Plat Maps Before buying A Land

When you look at questions such as lot size, whether a parcel is landlocked or has environmental concerns, look for property surveys and platforms to answer many questions.
There is a county surveyor in virtually any county. The office will have a flat map showing every parcel, lot lines, measurement, zoning, topographic and geography and adjacence to that office, or perhaps a county geographic information( GIS). Searchable online for many of these office maps and surveys. 

Finance Your Land Purchase

There are two ways to finance the purchase when you buy land. You can use cash, as usual; or, even though you have no total cash, you can get mortgages or other financing to enable you to buy the property.

Paying Cash

Given that raw land prices are usually below their developed counterparts, buyers pay cash very often.

 Moreover, raw land is harder to finance than buildings, as raw land is seen as a more risky investment by the banks. This results in even more cash shopping. Also bear in mind that cash does not cover the mortgage costs, meaning that only until the property is sold or developed are property taxes covered.

Conventional Loan Options

For land purchases a proportion of traditional lenders offer long- term mortgages. Generally, LTV is fairly low, and so be prepared to cover only 50% of the purchase price for loan options.

Land Loans and Lot Loans

Many lenders are focused on land loans or lot loans. In more rural areas, these are often economies and credit institutions. Land lending is typically less than the market rate, and 20- 50 percent lower than the previous year( 10 years or less).

Owner Financing

You will find that owner funding is more common in raw land than in developed parcels. This is because vacant land is usually more difficult to sell than developed properties and they are more commonly owned, which facilitates ownership financing.

 Profit When You Buy Land

There are several ways to benefit from it when you have purchased a package. In a fairly short time, some of the options generate a return. Others take longer and may take years to hold the property.

Hold Long-Term

One of the main strategies for land investment is simply to maintain for the long term and then resell as price increases. 

When development moves in the direction of the land you own, upward price pressure will be applied. The closer you develop, the more valuable is your land, even if you do not do anything about it.

Improve the Lot

Naturally, building on the lot increases its value. Whether it's a single home or a small commercial building, it's a basic way to benefit from the land investment from an untamed lot to the developed one. You can add value even if you run a lot of utilities or add a gravel road to make a package available.

Get the Property Upliftment  to a Higher Use

There is a "highest and best use" principle in real estate that can make land more valuable by changing its zoning, for which reason it can be used. For instance, if a large plot is zoned for agricultural use, for instance, and successfully rezoned, the value of the plot is likely to increase enormously.

Lease the Land that You Have Buyed

For land purchases, this is a often overlooked option. Many buildings are located on rented land in certain cities, such as Baltimore, Maryland. 

Mobile homes are structured around lots that are leased. Farmers can rent rural land for cultivation or grazing of cattle. Even large parcels can be rented to hunters in the most rural countryside.

Flip the Land Purchase

Although it is not as common as a flipping property, it is possible to purchase much at a lower price, and to resell it quickly at a higher price. 

The owner's financing of the purchase for the new buyer is one way for landfills to do so. Due to the relatively easy financing of the owner, sellers can ask for a higher price. 

Thus, the seller made a profit from the resale and also collected regular interest.

The Profit and Loss of Buying Land

Land is often ignored as a possible investment in real estate. However, the investment option has clear advantages. Naturally, limitations and disadvantages have to be recognized.

Pros to Buying Land

There are numerous arguments for undeveloped land investment. The price tag of many parcels and the hands- off nature of land as an investment include supply and demand.

  1.  It's a restricted resource, as Mark Twain and Will Rogers said somewhat, "Kuy land, you're not doing it anymore." This is true– and it shows that there is a fixed supply of land in a simple investment reality.
  2. Land is an unfavorable investment entry — for a new investor, purchasing property can be a very economical way of starting to invest in property. 
  3. There are locations in the country where construction lot for less than 1,000 dollars can be purchased. 
  4. The investment is hands- off– vacant land is essentially a passive investment. 
  5. No toilets can be remediated, no tenants can be expelled and no concerns about roofs in a storm. Your property tax is the only unavoidable obligation.

Profit to Buying Land

Notwithstanding the advantages noted, land investment has its downsides. Undeveloped land is usually not a cash source and ownership costs are involved. 
  1. You do not produce immediate revenues, and your purchase of land will not generate current income unless you are able to lease the land to a farmer and develop a mobile home park. This investment can take years before a return. It is a long- term investment.
  2. Does carry costs– while land generates current revenues typically, it has current costs. Property taxes are due every year or half year. You will have regular payments if you have financed the parcel. Even though you pay cash, this is no longer invested elsewhere. Closing costs, surveys and title insurance have been spent on cash.

Conclusion of the post:-

Land purchase could be a lucrative investment, especially as an investment strategy for the long term. Good parcels are purchased with careful research. Land investment is fairly passive but return generation is often time- consuming, but current costs still exist.

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