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We are considering spending 1/4 of our savings to buy a lakefront lot to build our retirement home on later. This is a property with about 30 actual home lots, five of which already have homes on them. The big advantage is that it is a prime good location with public sewer and community (well) water -- very unusual for lakefront. However, because of taxes and the fact that it is about 2,000 miles from our home, if we buy it, it will just "sit" for probably five years, but we will have no problem in affording to build the house after we retire.
We had a builder look at it six months ago when we first saw it when we were on vacation, and he said that he could build the 1,900 square foot house we want on it. (It is just about 100' by about 360'), and so we put down a deposit, but then the seller decided to take it off the market. Now it is back on the market for the same price.
We REALLY would like to buy it, but we would like your thoughts about pros and cons about buying the land now. The only down sides we can see are (1) that there might be unforeseen problems in building later (not with us, but maybe drainage or something like that); and (2) the fact that we will be paying about $1,500 a year in taxes and getting no return out of that money until we actually build on it (unless by owning the land, we might get a head start on establishing "residency" for tax benefits later on).
Last edited by katharsis; 04-24-2015 at 04:19 PM..
Trying to predict whether the price will go up or down is not always easy. If you buy now, you can lock it in, so you won't be priced out later. But then again, you will be paying property taxes on it without using the land.
You should consider whether you can afford to buy it later in the event it goes up a lot in price, and how likely it is to go up that much.
If it is going up a lot, it makes sense to buy now.
Trying to predict whether the price will go up or down is not always easy. If you buy now, you can lock it in, so you won't be priced out later. But then again, you will be paying property taxes on it without using the land.
You should consider whether you can afford to buy it later in the event it goes up a lot in price, and how likely it is to go up that much.
If it is going up a lot, it makes sense to buy now.
Prices have remained fairly steady in that area, supposedly -- not going up but not going down either. However, the five lots that have sold have all sold in the last year -- and the lot we are considering is the one we like the best, anyway (and it costs about 10-25% more than the other lots, too).
The main thing is that if we don't buy it now, we will probably lose it altogether. Yes, there are other lakefront lots available in other towns, but not with community water and public sewer in that area. Again, price is not the issue now or later, to repeat, we are concerned about is buying the land and not being able to build on it later because of issues with the land itself. Again, there are houses on the other lots and it is a planned community of about 30 homes, so this shouldn't be a problem (we THINK, as per the builder we had look at it), but we just don't know. So, as we are "newbies" to buying land and building a custom home, we are hoping that others might contribute pros and cons that we have not thought of.
THANKS IN ADVANCE to you and to whoever else replies!
Prices have remained fairly steady in that area, supposedly -- not going up but not going down either. However, the five lots that have sold have all sold in the last year -- and the lot we are considering is the one we like the best, anyway (and it costs about 10-25% more than the other lots, too).
The main thing is that if we don't buy it now, we will probably lose it altogether. Yes, there are other lakefront lots available in other towns, but not with community water and public sewer in that area. Again, price is not the issue now or later, to repeat, we are concerned about is buying the land and not being able to build on it later because of issues with the land itself. Again, there are houses on the other lots and it is a planned community of about 30 homes, so this shouldn't be a problem (we THINK, as per the builder we had look at it), but we just don't know. So, as we are "newbies" to buying land and building a custom home, we are hoping that others might contribute pros and cons that we have not thought of.
THANKS IN ADVANCE to you and to whoever else replies!
Why do you suspect the land might have drainage problems?
Why do you suspect the land might have drainage problems?
I don't -- I just used that as an example. As far as I know, there are no problems -- but I have been unpleasantly surprised in unforeseen problems in previous house purchases.
Personally, if you can afford it and know this is where you want to live in the future (which isn't really isn't so far away), I would go for it. What are the chances you will find another lot like it that is lakefront? Has living lakefront always been your retirement dream? Sometimes you just have to weigh the options and take the leap.
Recently, my husband and I bought my aunt and uncle's mountain cabin. They'd had it for 20 years and were just no longer able to visit it. We had visited it numerous times over the years and always loved it. In all honesty, we sort of figured we'd inherit it one day (they have no children). We probably would have if they had kept it. When it turned out they needed to sell it, we thought long and hard about it. Financially, it was pretty stupid for right now. But, it's an 2bdrm cabin on almost 9 acres with 2 creeks, a small pond, and multiple new springs. There's ton of trout fishing in the area and it's 30 minutes from the Blue Ridge Parkway and only 3 hours from our house. We decided to do it. We could see ourselves retiring there one day and the chances that we would find anything like it again at the price we were paying was very slim.
If for some reason your plans change, you can sell the property in the future. There's never a guarantee but I would imagine that lake front would be desirable in 5 years as it is now.
Again, price is not the issue now or later, to repeat, we are concerned about is buying the land and not being able to build on it later because of issues with the land itself.
Before you buy the property, you will need to fully investigate it to determine whether it will meet your needs--as if you were going to build upon it now. Is any of the property in a flood hazard area? Are there any regulated wetlands on the property which would limit development? (Wetlands do not necessarily have to exhibit surface water.) How much will it cost to hook up to both the sewer and water? Is there sufficient capacity to enable hook ups? What are the set back and other requirements under the local zoning regulations? How high is the water table? Will it enable you to build a basement, if that is in your plans? Are there any regulations, such as tree ordinances, which would require you to protect some of the natural features on site? Are there minimum or maximum size requirements for building? Oh...and is there an HOA?
As long as you can determine now that it is suitable for your building plans, chances are that it will be okay in 5 years. There's always a chance that some regulations may become more restrictive, but that risk is probably relatively slim.
Five years is not that far in the future, so I think that to buy it now would be okay if you're absolutely sure that that is the area where you want to retire. Still, I would recommend giving serious consideration to the possibility of buying an existing house when the time comes.
Some cities/counties charge INSANE fees to hook-up to water/sewer/power/gas......and the meters, yikes. If you can get a lot, with all of those services already on the property, you are going to save a LOT of money.
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