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Buying land to build and as an investment
Hello all. I need some advice, or better yet an assessment of
my plan for buying land and building on it.
Before I get started let me give you a quick back-story. I am 34, married with
3 children. I was born and raised on a farm in southern Maryland and my wife
was born and raised in the suburbs of Phoenix. We meet … had kids… and now live
in the suburbs of Austin but we are both dying to get out of the suburbs and
into the country, where I feel I belong. Here are some highlights
-Very good with construction (Have built 3 homes so far)
-Good with plumbing\electrical\woodwork
-Good job making 81,500 yr
-Credit is getting there (675\595\625)
-Rent lease expires next March
-Want 40+ acres within 1 hour from Austin
-Wife and I love the water and are looking for land with some water and trees
Now with all that said here is my plan.
Wife and I want to buy 40+ acres close to Austin and build a home on it and
after some time build a second, then a third and so on. As we build on the
property we would look at renting some of the homes out as, well I suppose it’s
my retirement plan. We envision no more than 5-6 homes on the property, all but
one will be about 1900sqft (The main home will be much larger). Until we get
the first home built (could be a couple years) we plan on moving into either a
thrown together prefab home, trailer or RV on the property (that is if we don’t
find this land with something already on it)
Now I’ve talked with a realtor and she tells me “yeah, no problem we can get
you there” but I fear translated it’s “whatever you want as long as you buy
from me”. I’ve also talked with my mother, former realtor and broker, and if it
was up to her she would have me buy a small home in the city and has attempted
to scare me into doing so as she tells me the following. “You can’t just buy a
track of land and put anything you want on it, there are regulations” and “Financing
for land is much harder to get than financing for a home” and “You can’t build
the home yourself you need a licensed contractor” as well as “Anything you
decided to do with the property will need to be approved by the city first”.
Now I understand she has some valid points but I also see a bit of an
exaggeration.
All this has led me to one conclusion, I have not learned enough to start this
process and if I want to buy something next March I better start researching
now.
So I welcome your thoughts, advice, directions and solutions as God knows I
need it. What else should I be thinking of? Is my plan realistic? Is there another
way to accomplish my goal? Help!? LOL
Thanks
Re: Buying land to build and as an investment
DIY & Home Decor Blog
A lot of research is definitely in order. You might not have to do all of the research yourself if you hire a lawyer that specializes in real estate laws for your area. Even if you do the construction work yourself, you might find that you do need to have a licensed contractor sign off on your work. You could be completely restricted by laws, ordinances, and lender requirements, or you might find that restrictions in the area you want to purchase are incredibly lenient (they might be if you're far out in the country enough). You won't know until you do the research!
One concern that popped into my mind - although, since you're not even sure whether or not it's possible, it might be premature to worry about - will the area that you're considering be something that could attract potential renters? You might have to find a balance between country for you....and close enough to the city or suburbs for future renters. That might be a question that a realtor can answer for you (maybe get more than one opinion). I know that Round Rock real estate is jumping in price because there aren't enough houses to meet demand. Although, I don't know how long that will last, and I don't know how far away from those areas into the country you can get while still reaping the benefits from the boom.
It's a good dream, but it will take a lot of diligent research and well laid plans to get you there. While you work on ironing out the details, you can continue working on improving your credit score, and saving up for that hefty down payment and construction costs.
When it comes to splitting the land up it gets even more complicated. If you want to build homes and break up the property thats going to cost money to break things up and a lot of legal mess to break up the acreage including easements, access etc.
As for building houses, regardless of where you live you are going to have to go through someone for permission to build the houses, as well as likely get lots of permits from the city for every step (electric, plumbing etc) which all require inspections as the building is being built.
I am not trying to scare you out of doing this, its totally possible and if you think you are up to the challenge its not a bad way to make some money. But there is no doubt that its complicated and drawn out. You need to do a lot of research about local requirements and ordinances before you start anything.
http://www.northwoodmortgage.com/mortage-questions/can-buy-section-raw-land-just-leave/