A few months ago, I chatted with a friend about whether she ever planned to move on from renting to buying her own home.
“What I really want,” she confessed, “is to buy some land outside of the city and build a treehouse on it.” (If you’re curious about what the heck a treehouse residence is, check out these stunning examples from around the world.)
Luckily for my friend and for many others who think out of the box, investing in real estate can take many different forms. If purchasing a standard previously constructed house is not for you, consider purchasing a duplex, a condo, a residential or commercial building, a farm, or even vacant land.
First, as always, call or email Pickett Street at to talk about your real estate options. The team can walk you through all the options. Then, take a look at the list below of pros and cons for purchasing vacant land.
Pros:
1. Owning vacant land as a long-term investment can be more affordable than owning a home. Property taxes and fees are often lower for vacant land than for developed land. Purchasing vacant land is also cheaper up front. Most vacant lots in the Seattle area, for example, cost between $70,000 and $500,000, depending on whether or not this land is waterfront property. The median home value in Seattle, on the other hand, is about $720,000.
2. Intentional land use and home design – Purchasing undeveloped land gives you the opportunity to optimize the property and build your dream, whether that’s a farmstead or a treehouse.
3. Less maintenance – Without the plumbing, electricity, weatherproofing, and other issues that accompany home ownership, vacant land is easier to maintain. Investors interested in managing their property remotely might consider purchasing vacant land.
Cons:
1. Permits and approvals required – Local zoning laws will determine how you can develop a vacant lot. Again, this part can get a bit tricky, so make sure you enlist a Pickett Street specialist to help you. According to Dave Van Horn at Bigger Pockets, “When I was in construction, I worked with builders who would include contingencies in their contracts, especially for larger land projects, and these often included permit approvals. If they were unable to acquire the permits for what they were trying to build, they wouldn’t buy the land.”
2. Fewer tax breaks
3. Lack of immediate cash flow
4. Often more difficult to finance
Finally, just as you would with developed land, find an expert who can help you carefully appraise this property. What’s the septic, sewer, water, and road access situation? Does the land have water run-off issues, as many areas of flat land do? Is the land steeply graded, which can make it more difficult to build on?
TL;DR: take your time to research the property and work with experts, but don’t be afraid to invest in nontraditional real estate options like vacant land. Contact Pickett Street to sort through these concerns and any other questions you may have ((425) 502-5397 or info@pickettstreet.com).