Buying land property is one of the most important purchases you make in your life. It’s an investment that can provide you with a greater profit if you decide to sell it in the future as its value appreciates.
However, buying land is an expensive endeavor, especially if you don’t know the ins and outs. So, in this blog post, we’ll list down the ways on how to save money when buying a land property.
Avail of the Services of a Real Estate Agent
You won’t only save time and effort, but you’ll also save a significant amount of money if you hire a good real estate agent. A realtor’s expertise and experience in the land buying process is crucial for you to get the best deal. Most newbie land buyers are averse to hiring a real estate agent thinking that it will only cost them much money. But, in reality, hiring one can save you some cash along the way. For example, your agent can help you when it comes to negotiations and protect you from the exorbitant expenses of buying a property that you may not be aware of. If you’re looking for a local real estate agent, you can ask your relatives or friends for referrals. You can also go to websites like Zillow and Trulia.
Choose the Right Location
Location is another important factor that you must keep in mind when buying land. For instance, the price of the land can vary from state to state. There is a statement, according to which Tennessee, West Virginia, Arizona, New Mexico and Arkansas are considered to be the cheapest states to buy land. While making the purchase plan, consider those regions for a better investment. There are properties you can buy that are more affordable than others due to their location. If you’re living in a crowded city, it’s likely that the lands selling there are expensive. So, why not look for a property in other areas, such as in the countryside? Find an area where there’s a chance to develop in the next several years. In this way, you don’t only save money, but you also have the chance to generate more cash in the future as the property raises its market value.
Look for Off-Market Land Property
Off-market properties are the ones that are up for sale without enough advertising. So, you can’t find them in online listing sites or newspaper ads. Some land sellers sell their land off the market because they want a more private sale process or they want to lower the cost of marketing their properties. The benefit of choosing an off-market property is that there’s no tight buyer’s competition. Plus, you can also obtain an affordable price offer. So, if you want to save some cash when buying land, look for one off the market!
Assess the Land Property
After you have found the perfect location where to buy land, it’s now your chance to look for the piece of property you want to purchase. You can have a shortlist of the properties that best suit your requirements and preferences. Make sure to assess every one of them according to your standards to ensure that you can avail of a reasonably priced land. Consider if the property needs a clean-up or installment of utilities like a water line. Does its soil need to be checked for toxicity content? Is it good for a residential or commercial building? You have to think about the money side of buying land because there are expenses that you need to cover aside from the price of the property.
Buy Land Using Your Self-Directed IRA
You can buy real estate properties using the money in your self-directed IRA. The only catch is that the property you’ll purchase must only be used for investment purposes, which means you and your family members can’t utilize it. Still, it’s an excellent approach if you want to set aside a significant amount of cash for retirement. So, make sure to buy land that can appreciate in value as time goes by. Another good thing about using the funds in your self-directed IRA is that you can enjoy a tax-free or tax-deferred income.
Get Loan Quotes from Multiple Land Loan Providers
It’s true that it’s hard to find loans for land purchases, but there are land loan providers if you need to borrow money. Of course, interest rates vary by lender, so you should obtain loan quotes from at least three loan companies. Then, pick one that fits well with your budget.
Negotiate the Price
One of the purposes of working with a real estate professional is to help you in the price negotiation. Your agent should have good negotiation skills for you to get the best deal. That’s why you should go for a real estate agent that’s already proven in his/her industry.
Now you know the various ways on how you can save money when buying a land property. Keep in mind to work with a real estate agent, choose the right location, consider off-market properties, assess the land you’re interested in, use funds in your IRA, get loan quotes from multiple lenders, and negotiate the price.