Steps to take before you invest in a land
For many people around the world, buying land is one of the biggest goals in life. People put all of their investments and savings in purchasing land for construction of their dream house, opening a restaurant, or starting a farm. Buying land is just as daunting as it is ambitious. While there are many online and offline services that offer help during the process of land purchase, the validity of these services is questionable. One has to be cautious when it comes to investing in a piece of land. Not every hoarding that says “Texas land for sale” should be deemed legitimate.
Over the years there have been many cases where hard-earned money of people has done wasted in dubious or faulty investments with little or in worse cases no returns. One should learn from these mistakes and look out for red flags as they study investment opportunities. There are legal contracts and rules surrounding the purchase and selling of property, and a smart person should familiarise themselves with these laws before making any final move. While it is hard to interpret and study the heavy legal language, the least that a person can do it at least familiarise themselves with basic rules of land trade.
If you are really confused about land laws and fear that you might invest in the wrong project, then the best solution to this uncertainty is hiring a lawyer or a consultant who can help you with background checks, paper authentication, and legal remedies. But if you are at a stage where you just want to browse property then you can refer to simplified documents of legal land investment provisions available online and have an idea about major clauses and checks related to property.
Here are a few steps that one should take before investing in a property:
What is the eligible use of a property?
It is important to know that the land you are buying aligns with the intended purpose behind its purchase. There is no use in buying a plot of land for commercial use when it is situated on residential land and can’t be used for commercial purposes. The easiest and fastest way to know the eligible land use status of your property is by calling the zoning and local planning department in the said constituency. A simple call will tell you about how the land can be used, and all your doubts about the same will be settled. The zoning office will inform you about the classical under which the said property falls such as mixed-use, residential, commercial, agricultural, etc. You should also ask for examples of what kind of structures can be built on that land despite knowing the classification. The more specific your question is the better will be your understanding of the land.
Know about the tax obligations involved with the certain property
Taxation often falls under the category of hidden costs. People are often focussed on paying the principal amount of land and don’t consider tax rates into the equation. As a result of this, they end up paying high rates which goes over budget and results in some financial loss too. Therefore, it is important to have clear knowledge about tax obligations. Ideally, the tax rates should hover around 1 per cent to 4 per cent of the total price. Anything more than 5 per cent is deemed expensive by industry average.
Study the topography of a property
Studying the topography of a property is the most important and crucial step that one must finish before finalising the investment. Studying topology should not be restricted to a casual excursion of the site, and it should involve the scientific and official study of soil top, underground rock formation, and environmental study. During the dry season, a wetland may appear to be a normal piece of land but in the rainy season, the same place will be flooded. Similarly, there might be aqua ducts below your property that may cause flooding in future. One should properly assess these things and get necessary clearances on the same.
What are the resources around the property
There is no point in buying land or property that does not have basic facilities like the proper sewage system, drinking water supply, and electricity. One can get large expanses of land outside the city limits and in remote areas because these venues lack resources. Sometimes people get impressed by the large parts of land available and forget to investigate its details. If you buy property in a place where there are fewer facilities, then you will have to end up paying for them directly and indirectly. The absence of public transportation, hospitals, and markets will result in indirect costs such as long car drives and inconvenience.
Is the shape of the land usable?
This is a much ignored but equally important factor that people should keep in mind. A piece of land might be large, but if it is not in proper shape, then it is practically useless for construction. For example, you might want to construct a rectangular 100 sq. feet apartment block but if the land is shaped in a steep crescent shape, then the construction won’t be able to take place even if, in terms of state occupation, the said piece of land is enough. The shape of the land is as important as its size.