Research a Neighbourhood
Any real estate agent will tell you that location is everything when buying a home or a piece of property to build a home. There’s no sense in building a house in a declining neighbourhood as you would never recoup your investment. You might not even be able to sell the home when that time arrives.
These tips will help you to discern whether a piece of property is a good investment:
Future Zoning – Check future plans for the neighbourhood at the county zoning department. Your piece of paradise might have industrial or commercial property nearby that the owners have not yet developed. While a grocery store might not affect your home’s value, a cement plant or a fertilizer factory certainly will.
Speed Limit – Roads with a speed limit of 60 km or above are the most likely ones for expansion as the neighbourhood develops and traffic increases. A 2-lane road today could be a 4- or 6-lane highway in future years. Those extra traffic lanes come from your front yard.
Subdivision Restrictions – A lot within a subdivision probably has deed restrictions. They can include:
- Style and size home you are permitted to build
- Whether you can fence the property (green space regulations)
- Outbuildings, such as a workshop or detached garage
Utilities – Underground utilities are the new norm. However, you have to pay for the connection from the street to your house. Semi-rural lots might not have utilities in place. Wells are expensive to dig, especially if you need a deep one. Check the water table before you buy.
Schools – Even if you do not have any kids in school, the homes in neighbourhoods with good schools are more likely to increase in value. Additionally, homes surrounding a university are usually a good investment. Choose a building lot location in a good school district.
Rentals – Neighbourhoods with a high percentage of home rentals, usually more than 20 percent, generally have declining property values. Landlords are less likely to invest in a property’s upkeep since they purchased it to earn a profit. Choose a location with a high percentage of owner-occupied housing.