Twelve months ago, hubby and I had the great idea to purchase a block of land. The purchase was an entirely emotional decision. I’ve wanted to live in the area for years. It’s where I wanted my dream home to be. A few years earlier I had already looked around but my husband didn’t like the hills. It took him a few years to warm to the either that the area was great as it was close to the school we wanted to send our son to, a ten minute drive to the beach, another ten to the mountains, and close to shops, the park and the train station.
From finding the block, to putting in an offer, organising finance and finally settling on it took just over three months. It was frustrating, emotional and I almost got to the stage where I wanted to pull out. Was all the hassle really worth it?
I’m glad we purchased it, although in hindsight I would have done things a little differently. Ok, maybe even very differently.
10 Considerations Before Buying A Block Of Land
*Due diligence. Make sure you do yours. Just because there’s no house on the block doesn’t mean there’s less to consider. So you’re not worrying about a building inspection or termites there are things that you should consider before signing on the dotted line.
* Obtain the plans of the block from the seller and make sure that it clearly outlines the incline and decline of the block. Ideally you’ll want a flat block. Just because it looks mostly flat from the road doesn’t mean it is. Flattening the block isn’t as simple as it sounds either. If you’re in love with a block of land take the plans of it to a few builders (at least 3 but no more than 5), and find out whether they are comfortable building on it. Not all builders will construct a home on a sloping block. The limit is generally 2m of slope. Ours had 4-6m depending on the section. Rookie mistake. I wish someone had told me to do this before I put in an offer and paid a deposit.
* Check pricing. A house on a flat block versus a sloping one will be significantly cheaper. We’re talking in the $100,000 – $200,000 vicinity depending on the type of house you’re building.
* Do you want a project home or custom design? Project homes are cheaper but there are more restrictions. We got our hopes up with a house and then the builder enlightened us that it just wasn’t going to happen. We wasted time and time equals money in the building game. Had we done our due diligence from the start, we would be already moving into our new home.
* Consider the location. Ideally you want to make money on your property and not lose it. Land is a big investment. Check if there are any further land releases planned for where you’re planning to buy. If land is scarce, prices are likely to rise. If there’s a lot of new land available then it’s possible that prices aren’t going to move much or your land could fall in value.
* Have you calculated all the costs? Maintaining a block of land costs money. We’ve had to pay rates and water on the block and we haven’t even started constructing a home on it. The lawn has had to be mowed. While that’s done by us, it costs us in time. Then there’s the interest on the loan against the property. The dollars keep adding up.
* You will need a soil test. Not all soils are created equal. There are various classes and each will impact the cost of your house construction and the type of house you want to build. It’s better to get this done first before being told that your dream home is not realistic for the property you’ve purchased.
* Permits are a necessity. Just because you own the land doesn’t mean you can do what you please on it. Oh, if that were the case we mightn’t have all the lovely housing estates we do. Permits keep things in order and ensure that your neighbour on the right doesn’t construct a castle and the one on the left use her block as a warehouse. Find out what you need a permit for. To begin with you’re going to need building approval for your chosen property. If you live in an estate you might even need approval for fencing, driveways and your colour scheme.
* Can your future view be obstructed? Just because you purchase a block of land with gorgeous views of hills or the ocean doesn’t mean it’ll always be so especially if there’s room for someone else to build in front of you. The upside of having an upwards sloping block is that you can make the most of the views by building a multi-storey or split level home. But again, you need to consider costs, as the higher you go, the more money you will need to be willing to spend.
* Are you willing to wait 6 – 18 months before you move into your new home? That’s how long it can take for your home to be built. Buying the block of land is just one step. The preparation for building alone is time consuming and stressful, especially if most of it is on your shoulders. Do you have the time and energy to handle the stress?
There are many things to consider before you build a home and these are just scratching at the surface. The idea of building your own and being the first owners and occupants of a property is awesome but it’s not for everyone.
Make sure you consider everything before signing on the dotted line to buy that block of land.
Have you thought about purchasing a block of land? How much due diligence did you do?
Any tips or tricks you’d like to share?