Drawbacks to Buying Land

 

 Finding skilled craftsman willing to travel might be difficult. Some might not show up as promised and may want higher wages to compensate for the distance. Transporting building materials and paying for delivery will likely cost more over building a home in the city.

Although modern conveniences are available, they aren't always reliable in the middle of nowhere, which is why many home owners in the country use generators as a back up when utilities fail. Going into town for groceries and other shopping needs generally requires planning and long trips. If it snows, and the roads aren't promptly plowed, you could be snowed in for days.

Renting Before Buying Land

If you are unfamiliar with an area, it might be a good idea to rent a home first before buying the land and beginning construction. As a new resident, you can get to know the community first hand and hear stories from local owners that you won't hear if you pull up in an SUV with a fat wallet in your pocket asking about MLS listings.
Resale value is often softer in the country than the city. That's because the pool of potential buyers is smaller. If demand is low and supply is high, home prices will be more negotiable. As a tenant, you can try to time the real estate market and be ready to buy that parcel of land when it first becomes available.

Factors to Consider Before Buying Land

• Zoning Requirements Check with local authorities (city, county and state) to determine zoning ordinances and whether you can build the type of home you want before committing to buying the land. A community within 20 minutes of Sacramento city limits, for example, does not permit construction of any structure on parcels smaller than 20 acres. Ask about future zoning, whether there are plans to put in shopping centers or airports, or to change nearby land uses that could also devalue your land.
  
• Smells and Sounds Realize that you might be trading exhaust fumes from city buses for the lovely odors produced by pig farms. Some farm animals such as geese and donkeys produce squawks and brays that travel for miles. Horses along country roads drop steaming piles of waste. It's not like anybody carries along a plastic bag and picks up after their horses.
  
• Natural Hazards Obtain a natural hazard disclosure and look for soil problems. Some parts of El Dorado County near the Sierra, for example, have naturally occurring asbestos in the rocks and soil. A disclosure will tell you if the land is a protected habitat, which would prohibit building. Is the area a known fire hazard? Is the fire department supported solely by volunteers? Many owners in the country maintain private ponds for fire emergencies.
  
• Elevation If the land is located near hills, how likely is the land to move? Some slab foundations can crack if the land is unstable. Find out if your parcel lies within the path of a potential landslide. For construction near bodies of water, you might want to consider building a raised foundation and make sure to buy flood insurance. If the land was once a swamp, ask neighbors about the condition of their foundations.
  
• Easements If access to your land is provided by driving across an adjoining parcel, you should obtain an easement and make sure it is recorded. Find out who maintains the roads and what your prorata share might cost for upkeep. What rights do neighbors have to cross your land? Are the boundaries clearly marked? Obtain title insurance, which will disclose easements and restrictive covenants or conditions. You might want to order a survey of the land.
  
• Utilities Water is important. Not all water is potable. Sometimes water rights don't "run with the land," which would mean you could not dig a well. Find out the depth of your water table and determine the difficulty of digging. Is the ground mostly rock? It can be costly to bring electricity, telephone or cable services to the property if they are not already established nearby. Will you need to install a propane tank? Consider a generator for back-up during power outages. If you cannot hook up to a sewer, what will it cost to install a septic system?
  
• Appraisal It's common to pay cash for land. If you're not planning to finance the land purchase through a conventional lender, which will require a lender appraisal, then obtain your own appraisal to determine an appropriate price before making an offer. Comparable sales are sometimes difficult to find when buying land.
  
  This property advise blog is brought to you  by E Estates 

Buying a Commercial Property

Think carefully about whether purchasing commercial premises is the logical next step for your business - take time to weigh up the pros and cons.

• Advantages:
• You are free from worries about rental increases
• If the property increases in value, your business benefits from capital gains
• You may be able to fix monthly payments, to give yourself security over your outgoings
• Interest payments on commercial mortgages are tax deductible
• You may be able to sub-let a portion of the property, to lessen your mortgage payments (so long as your lender agrees)
• Your mortgage repayments are likely to be similar to rental on a similar property
• You can re-mortgage to raise finance
• You gain operational flexibility, because you can design the premises to suit your business, or to rebuild and extend as your business expands.
• Disadvantages:
• You will need to provide a deposit of between 20% and 30% of the value of the property in advance
• You will have to finance the upkeep and maintenance of the property
• If the property loses value, it will impact on your business capital
• Depending on interest rate movements, your mortgage payments could increase
• You have less flexibility to cope with changes in circumstances - to take on more or less space, or to move to a different location - than if you are renting
• Buying premises ties up cash flow which could be invested in new employees, or plant
• You will make property ownership a central part of your business, exposing yourself to an unpredictable market. This could leave you with a large and unproductive asset, which still incurs costs.

• what kind of premises

• Depending on the kind of business you run, choose your premises to fit your specific criteria. Decide how much room you need per employee, and whether you need additional space for meetings or interviews. Do you need parking space for visitors or customers? Do you need extensive storage space? Consider taking more than one premises, with a less expensive location for archive records, for example.
  Consider modern buildings with good natural light and security systems built in.
  Also consider that if you are, for example, a manufacturing company, you may need permission to conduct your business.
  

• location, location, location

• Look for a location which best suits your business needs.
  
  • If you are a retailer, you may need to be close to your customers or suppliers, with good visibility
  • If you use high tech communications, you could choose a more remote location, saving money
  • If you produce goods, transport links may be a crucial factor
  Consider the commuting needs of your staff. Can your employees travel easily to your premises? You will have to pay more for premises in a city centre, but your choice of potential employees will be greater.
  City centre locations often suffer from higher crime levels, more noise and pollution and higher parking charges. Out of town locations offer better parking options and are typically cleaner with modern buildings, but may have fewer amenities such as shops and restaurants nearby.
  

• refining your search

• When tracking down the ideal commercial property for your business, you'll need to do some research to find the ideal spot to set up shop. Try reading property industry journals such as Estates Gazette and Estates Times - they publish regular surveys of different areas and industry sectors. Make contact with local businesses and organisations, such as Chambers of Commerce or Business Link, to ask advice on where to buy. If you have personal contacts that have business premises in your area, call them to ask whether they know of oppEortunities.
  Do you want a house, a flat, a maisonette, a bungalow or a cottage?
  

• financing the purchase

• Unless you have a large amount of spare cash, you are likely to need a commercial mortgage to finance the acquisition. Bear in mind that you will need to commit to a minimum mortgage term of around 15 years, and will have to provide details of your business accounts and cash flow projections to the lender.
  Typically, commercial mortgages require a substantial deposit - perhaps between 20% and 30%. The property will be at risk if you are unable to keep up mortgage payments.

This advise is brought to you by E Estates