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People have often asked me my best advice on property development.
it is: “What you don’t know is the thing that can hurt you the most.”
That statement is true for many situations in life, but is especially true as you embark on finding the perfect rural home or retreat.
The thing you don’t know will not just cost you a little more money and time.
It might mean the difference between meeting or missing your ultimate goal.
Let me explain.
Advice on Property Development That Can Hurt You
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 buy it and want to start building your home.
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 did he say…no water?
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.
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?!
Or maybe this situation:
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.
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?
These are two very real-world examples of what can happen if you haven’t done your “due diligence” prior to closing.
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.
But don’t be discouraged–there is no reason to shrink from developing your new farm or ranch even with these potential issues.
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.
If you have ever purchased a home, you know that part of that involved a “house 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, 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.