Get the real deal on real estate and before you develop property. People have often asked my best advice on property development and buying a rural property. It is: “What you don’t know is the thing that can hurt you the most.” This statement is true for many situations in life, but is especially true as you embark on finding the perfect rural home or retreat when moving to the country.
The thing you don’t know will cost you more money and time. It might mean the difference between meeting or missing your ultimate goal. Let me explain.
Property Development Advice
Let’s say that after looking for a while, you found the perfect ranch, farm, or property to develop. You and your family have a list of things to look for, and on the surface this one piece of property looks perfect!
It is a beautiful site. It might even have an old barn on it. So you quickly put in an offer and buy it and want to start building your home. But wait! Don’t rush into it. You must consider everything before committing to the property.
In addition to thinking about the condition of the roads — how accessible is your property — and property taxes, consider what you want to do with the land. What are the ordinances and covenants? Be sure the regulations will legally enable you to do what you want to do. Some additional things to consider are:
No Access to Water
You call the local well drilling company and they come and meet with you. After looking around, they tell you the news: There isn’t any water to drill for. The ground is shale, which doesn’t hold any water.
You become a bit numb. What? No water? how can that be? More importantly, what does that mean for me? What do I do now?
There is a slight possibility that they can use new technology to fracture the shale and perhaps get a little bit of water. The bad news is that this all could cost you upwards of $25,000 — and that is something you don’t have. Also, there is no guarantee that you will even get water.
Another situation can be that there is a well but the well is dry. Some reasons for this can be perhaps the well isn’t deep enough or the porosity and permeability of the underground rock makes it so the water level is low?
Wells that are not as deep as the wells in a confined aquifer table in an area where pump use is minimal are at greater risk of going dry than those in a confined aquifer in deep wells on a higher pumping level.
So what do you do? You ask yourself, How did I get in this mess? Why did I buy this?
Without water, no house. And you are now proud owners of a place that has no water. Gee, could that be the reason why the property was so cheap and no one had purchased it?!
Property Access – Do You Have an Easement?
You found this same perfect place. It was a good fit. Everyone told you it was perfect. You noticed that access to the piece was through another parcel. The road was there and everyone said it was the official access to the property.
So you bought the property, but the next time you went to see the place, the road was blocked. Really blocked. The neighbor whose property the access road went through said he didn’t have to give access legally, and with a change of ownership he decided to stop it.
So now what do you do? Enter a costly legal battle? You are proud owners of a place that you can’t gain access to! How did you get into this situation?
While people move to the country to get away from it all, the internet is what makes rural living seem less isolated. Especially with more people working remotely, you’ll want to be sure high-speed internet access is available. It’s an essential anymore, even if not for you but for potential resale down the line.
Do Your Due Diligence
Not having access to water, even from a well, no easement, and no internet are all very real-world examples of potential downsides to a property. However, if you do your due diligence prior to closing, and don’t buy the property, you won’t be put in a costly situation.
The best real estate advice is to do your due diligence. This cannot be overstated. Due diligence is the process where you resolve all issues and questions regarding use of the property in the way you plan to use it. Use a due diligence property worksheet before committing to a rural property or farm or ranch property. Ask questions of the real estate agent or the homeowner if it’s a for sale by owner property.
If you find out something after you’ve entered into a contract and committed escrow funds, don’t be discouraged. Depending on the problem or situation, there may not be a reason to shrink from developing your new farm or ranch, even with these potential issues. Perhaps the seller will offer to pay for half or work out another arrangement.
Property Development Advice Dealing With Problems After-the-Fact
Regardless of size, each project has a start, and from then on it is a step-by-step process. It is both exciting and nerve-wracking. But it achieves something very special that is bigger than ourselves. It is leaving a legacy for those that will follow after us. And experiencing a common goal and outcome brings family together.
Is it an easy process? No. There are lots of things to consider, but each development/construction issue taken individually can usually be resolved with a positive outcome.
What To Know Before Buying Property
If you have ever purchased a home, you know that part of that involved a home inspection. This inspection resulted in an objective opinion of the pluses and negatives of the house, as well as present and potential future issues.
This kind of inspection is different for land / farm / ranch purchases, but the principle is the same. You just want to know what the whole situation is and don’t want to stumble into an unanticipated web of problems and issues.
These can involve county planning requirements, legal issues, water/utility issues, internet access, and many other factors. Many things can be investigated quickly, while some issues may require more involvement.
But in any case, the resolution of your concerns prior to purchase will give you peace of mind and maintain the development momentum you’ll need as you move forward. Even a negative resolution is a positive thing if it keeps you from purchasing a parcel that will be nothing but a headache.
Constructing a property is an important decision for any individual. Whether the building is residential, commercial, or otherwise, it is worth considering what kind of construction materials are most desirable for the values desired. There may be some trade-offs with higher durability and maintenance costs versus minimized cost but greater flexibility in design.
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