7 Great advantages of buying vacant land
Whether you are looking for a block of land to build your dream house on or are looking to buy land for investment purposes, there are a number of great advantages to buying vacant land that many people don’t realise. Ideal for first home buyers struggling to enter the property market and investors looking to diversify their property portfolios, vacant land is worthwhile considering.
So, what makes vacant land so attractive? Here are 7 advantages of buying vacant land.
7 Advantages of Buying Vacant Land
1. Affordable If you are struggling to buy a property, particularly in the major cities like Sydney where property prices are some of the highest in the country, buying vacant land does offer you an easier and more affordable way into the market. Vacant land is far more affordable compared to land that has already been built on. One tactic is to buy land today and build on it later when you have a larger budget, ensuring that you won’t be priced out of the property market in the future.
2. Greater customisation A great advantage of buying vacant land is that the land is yours and you can do whatever you want with it, as long as it’s within the limitations of the council’s zoning and building codes. You can leave it as it is, or build a home on the land tailored to you. Have a swimming pool at the back with an alfresco deck, or have a smaller yard and a larger home. There is always the option to sell it on to a developer or build a commercial property on it.
3. Low maintenance Another advantage for buying vacant land is the very low maintenance that is required, compared to keeping a property in good condition. You don’t need to worry about repair work, renovations or finding a plumber. Besides having to mow the lawn to keep the land in a reasonable state, there’s very little else you need to worry about. Vacant land also requires less of your time and less stress, making a land purchase a passive long-term investment purchase.
4. Lower costs Buying vacant land also means that your rates, insurance and property taxes will be much lower than if you buy a property. If you are an investor, you also don’t need to pay a Property Manager to look after the land for you, or worry about finding or evicting tenants. As it doesn’t take a lot of money to get started, many of the vacant land purchases are for cash, which means there is the potential to eliminate mortgage lenders.
5. Long-term appreciation One thing to consider when buying vacant land is that the land will usually remain in the same condition in which you bought it in. The weather and erosion may have an impact, but generally over the long term, vacant land tends to appreciate very well.
If purchased correctly, then your land could see significant appreciation. This usually happens if the land is in an undesirable area, but the area around it goes through some regeneration and becomes a far more desirable place to live. This is particularly true in areas which have been pinpointed for major growth centres and rezoning of land, which can lead to price hikes overnight.
6. Lower competition If looking to buy vacant land, then a major advantage is the smaller amount of competition you will be facing, allowing you to negotiate to get a better deal.
7. You can buy the land without seeing it You don’t need to see the land in order to purchase it, which is advantageous to those living interstate and don’t want to fly to see a block of land. It’s pretty easy today to purchase land over the phone or the internet, as long as you are provided with all of the relevant information to go with it.
Disadvantages of buying vacant land Although there are a great number of advantages to buying vacant land, it’s also important to consider the disadvantages. Firstly, it’s essential that you do your thorough research and purchase the land in a good location, which is likely to appreciate in value in the years to come. The last thing you want to do is buy some land in the middle of nowhere, only to find out that you cannot sell it later and you’re stuck with it.
1. Look at the land’s history When buying vacant land, you should also consider its history and what the land has been previously used for as this could affect your plans and future use. You can get a topography and a soils report to ensure you can build on the land, whilst you should check that the land is 100% yours, and does not allow anyone to pass over it. You should also find out why the land is selling in the first place, as this could indicate that something is wrong with it, especially if it is being sold cheaply.
2. Does not generate income straight away Unless you are renting your land out for parking or leasing it to farmers, your vacant land will not generate you any income immediately. You will only generate an income once you sell the land for more than what you initially paid for it.
3. Rezoning If you are purchasing the land in the hope of it being rezoned, then you need to think twice. Firstly, it might take some time before the land is rezoned to something that allows you to build on, or it might not happen at all. It’s therefore important that you do consider the location carefully. Land bought close to core amenities such as retail, schools and hospitals will usually mean the land will appreciate faster than land bought in the middle of nowhere. Land that can be developed on will always be easier to sell than a lot of land that has restrictions.
4. Land size It’s best to buy smaller pieces of land compared to larger land lots, as the larger the land size, the harder it is to sell. You should also consider the shape of the land and whether it’s prone to flooding. It’s easier to build a property on a plot of land that is flat, than one on a hill.
5. Road infrastructure and utilities You also need to consider whether your vacant land is connected to a road and can be connected to public utilities such as water, gas and electricity. In order for development to occur, the utility connections and sewerage needs to be in place.
Get in touch Like any investment decision, it’s best to speak to the experts before you consider buying vacant land. Speak to your Mortgage Broker about your borrowing capacity, whilst our Property Consultants at iBuyNew can also assist you with buying vacant land and the procedure of buying house and land packages if you are thinking about purchasing land to build a home on.
We have a number of vacant blocks of land selling right now across Australia and as Mark Twain once said, “Buy land, they’re not making it anymore.”
Interested in learning more? Call iBuyNew today on 1300 123 463.
Published on 20th of July 2017 by Marty Stanowich