Downsides of buying affordable land and doing nothing with it for 20 years? (Fern Forest: mortgage, loan)

[hotzcatz]

Did those "subdivisions" ever get built up enough to actually collapse? They seemed more of a virtual subdivision than anything else. Lines on a map, a metal spike at each corner to designate each lot and a one pass bulldozer track for a "road". That was the original "subdivision" for most of them although they've improved - at least somewhat - since then, but they still aren't a true "sub-division". Although most of them have at least a few hardy souls off in the underbrush here and there hacking out a place to live. Some of them have been surviving and little structures are surviving here and there, but "subdivision" isn't really the proper term for those areas. At least, not the way the mainland folks use the term.

Some of them are getting somewhat civilized, though. HPP, Leilani, Nanawale, Hawaiian Beaches/Shores, Ainaloa at least have a lot of build up and roads that don't require replacing the suspension every year. They pretty much have power throughout their area, too. There are about three tiers of "sub-divisions". Level One are those which have quite a few paved roads and the rest are pretty accessible roads (rock, gravel, etc), electricity available, some houses built up, a community center of some sort. Which would be in level of build up (I'm just guessing here, the real numbers may be entirely different): Ainaloa, HPP, Nanawale, and then? Level Two sub-divisions have road access but not a lot of paved roads, some power in the area, some community area but less build up. Those would be Orchidland, Hawaiian Acres, Fern Acres, maybe Fern Forest? Then there are a pile of Level Three sub-divisions which have rocky 4WD access, no community areas, no power, etc. They have a tendency to be the smaller ones, too.

Still even with the Level One subs, there is no mail service to the houses, not many with water service, no rubbish service, no sidewalks, etc.

[HiloDiver]

Originally Posted by OpenD

Exactly. And after 20 years much worthless land are still worthless land. All those collapsed subdivisions from the 1970's are visible from space, but hardly discernable... much less salable... on the surface.

Lots of those subdivisions in the Everglades, the Florida Keys, and many other places...I suppose if it wouldn't bother you to take $6K to Vegas to have fun, then buying this vacant land wouldn't bother you either.

Still...20 years from now, are you really up to building new construction on the site? Will you be able to afford that in 20 years, how will your income/assets look then?

[CyberCity]

Originally Posted by Tiger Beer

Downsides of buying affordable BIG ISLAND land and doing nothing with it for 20 years?

OP said he's looking at only $6K. Even if it is run over by lava, it's not that big of a hit in the pocketbook.

Minimum tax for Hawaii County per lot is $100/year since 2008-9. (It has taken approx 30 years to go from a minimum of $25 up to $100.) A $6K lot would fall into that minimum category.

If you have a homeowner's policy on other property, it will probably cover additional vacant land. (I don't know if a renter's policy does that or not.)

Checking into homeowner's dues will help indicate what those costs will be, and if the money is put into improvements (ie roads).

When buying cheap land, it is location location location. We have a great place in south kona, in a nice relaxed steadily growing small development with a knockout ocean view. Roads are worked on annually. Electricity is available on many of the streets. Our dues (under $250/year) cover road maintenance and a professional property management for the subdivision (overseeing the budget, roads, rules, etc). We choose wisely and did well. It was a matter of doing proper research, and never buying sight unseen. Because, the reality is that for $6K you might get a decent lot, or you might get a hole = caution needed.

[HiloDiver]

CC, good post, you did your due diligence and you'll be OK. You're right, location location location. Hopefully your post will help OP.

[CyberCity]

Oh we did grand. That is the lot where, decades later, we have our beach cabin.

[HiloDiver]

Keyword: beach. Location, location, location.

[CyberCity]

Yep, either near beach and/or ocean view are indeed a wonderful thing to have as a lot description. Although, I've seen some spectacular mountain lots also. "Location" and "seeing before buying", my two recommendations.

[HiloDiver]

Amen to those suggestions!!!

[CyberCity]

Uh huh, plenty in this thread to think about.

[terracore]

Originally Posted by CyberCity

Yep, either near beach and/or ocean view are indeed a wonderful thing to have as a lot description. Although, I've seen some spectacular mountain lots also. "Location" and "seeing before buying", my two recommendations.

Yes. Also beware of a realtor favorite "possible ocean view from second story" when no second story exists.