Tips when buying vacant land. Here we discuss what to consider when purchasing a block to build on.
Buying land is a very exciting time, regardless if its to build a home to occupy or invest, let’s explore the topic of buying vacant land.
Understanding the legal obligation
When buying vacant land you should have the contract reviewed by a solicitor to ensure the content is satisfactory. When purchasing a block from a developer it is an automatic unconditional contract, which means you are bound to settle it, usually 14 days after it has titled. Land often has covenants limiting you to build a certain type of home or use certain materials, there maybe a timeline to commence a build and some new land estates offer internal amenities that require you to pay an annual membership or owners corporation fee. Other legal obligations is to ensure you don’t build on an easements such as sewerage infrastructure while you may not be allowed to build from fence to fence.
Location
Location is notably one of the most influential factors for future capital growth or higher rental income. Buying vacant land near shopping precincts, medical facilities, public transport and schools will all provide a positive outlook for your property. All of these can be great, but being too close to certain amenities can also limit the properties profit potential.
For example, a house sitting on a train line will not necessarily pay you dividends in the long run, but the block may be bought cheaper to other opportunities. A home may need additional acoustics and double glazing that will increase your building costs too. As you can see, there is a lot to consider when it comes to location.
Housing zones
The property you’ve sourced may tick all the boxes, but if your property is in a bushfire or flood zone, this may cause problems. These higher-risk zones can place incredible difficulty to get finance to buying vacant land, but also challenging to insure.
Access to utility services
You need to make sure the property has access to a variety of utility services including , electricity, gas, NBN internet, sewerage and water. Check to see whether any of these provisions are already in place. If these are not included, they can be quite expensive to connect. In regional areas, this can be a more common issue. Some locations may simply not have sewerage and water infrastructure nearby to connect to. If this is the case, you may not be able to build on the block.
Block orientation
Building an energy-efficient home will help both your wallet and the environment. This is where paying close attention to the direction of the land you’re purchasing pays dividends. A northern orientation ensures that the home receives adequate natural light and warmth in the winter while also shielding it from excessive heat during the summer. In most cases, having a house built with optimal orientation will save you money on your energy expenses in the long term.
Land size and/or shape
The size and shape of the property you purchase will have a significant impact on the design of your home. Purchasing a rectangular block is a common decision, especially for resale. Consider what you want to do with the land before you acquire it. Do you wish to subdivide your property? Does the land dimensions fit the plans you have? Knowing these things before you begin your search will aid you in selecting the finest block for your requirements.
Terrain of the block of land
In the event the block has a slope or the site has excess rock, it will add to the cost of your build. The builder will need allocate time and money to the site preparation. When choosing a block of land, you should really assess the terrain very carefully as the build may be very high.
Soil quality
Soil testing is essential when considering a build. Testing the soil helps guarantee that your block doesn’t have any issues. A soil test will look at the soil’s physical and chemical properties to see if it’s safe, as well as assist you to estimate the block’s stability and land retention.
What type of home do you want?
When visualising the block, you need to also be aware of the type of house you plan to build.
- Will the land size or shape allow for the build?
- Will the home be too big?
- Will it have room for an alfresco or a backyard?
Everyone has a different set of objectives, particularly an owner occupier versus an investor, so you need to have a clear purpose behind buying vacant land in advance.
Development activity
This is a silent influencer and should not be underestimated. When buying vacant land, are you aware what is occurring around it? Will there be planning that may displease you, such as a new freeway being too close, an industrial site or something that may degrade your view or street frontage? Spending time assessing the neighbourhood and community is a wise decision.
What should I do?
If your selected block ticks all of your boxes then its time to celebrate! Buying vacant land isn’t an easy task. Seeking property advice will help you make the right decision and ensure you are more productive with your time. There are other contributing factors and questions to ask. These are just a few important things to consider before buying. At Crest Property Investments we specialise in sourcing brand new and off the plan properties for buyers. We also do not charge fees to buyers!
If you’d like to learn more, please feel free to contact us. We welcome the opportunity to help you make the best property decision.
Our YouTube channel and Market Insights are also a great place to gain more tips. They provide a wealth of information to assist you with many areas relating to property.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more please contact us. We welcome the opportunity to assist you.
September 2023
