Downsides of buying affordable land and doing nothing with it for 20 years? (Hilo: power lines, insurance)

[Tiger Beer]

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

With prices so low...$6,000 or whatever they can be had for. But what are the downsides of that?

How much is property tax on something like that per year? Any other major downsides? I'm sure there are plenty of reasons NOT to do that (or else everyone would)...

But, just curious, some of the more obvious or not-so-obvious reasons...?

[whtviper1]

Originally Posted by Tiger Beer

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

With prices so low...$6,000 or whatever they can be had for. But what are the downsides of that?

Downside - it gets covered with lava.

Edit to add - you probably have to tell us a specific place to tell you the downside/upside - I'm not seeing $6,000 at a very quick glance not that they don't exist.

[HiloDiver]

The liability as a property owner if someone should get hurt on your property. Although insurance would cover that. In another thread, someone mentioned squatters. Those are the downsides. But people do it all over the world, I know lots of people who own undeveloped land in other places. I've yet to see any of them actually do anything with that land.

[HonuMan]

Be careful where you buy, or at least know what you're looking for. My wife and I were thinking about getting one of those inexpensive, three-acre parcels between Hilo and Volcano, and eventually building on it. An old friend of ours, a retired Hilo realtor, advised against it. First, much of that really cheap land is in the high-risk lava-flow zone. Second, some of those lots aren't accessible except by four-wheel drive vehicle (i.e., no paved roads), and it can get very muddy and messy during rainy periods. Third, most don't have utilities. We figured that, by the time we move there, roads and utilities will be in place, but our friend told us, "Probably not." He said that, if the government puts in services and utilities, and they're destroyed by lava or resulting fire, then the government will be under pressure to reinstall them, if possible, which will be very expensive – whereas if they never install services in the first place, they won't be under any pressure. Fourth, a lot of those back-country lots are used by or are adjacent to land used by pakalolo growers, and they don't appreciate outsiders. Fifth, some are near pig farms or otherwise next to neighbors most people wouldn't want to live by.

That isn't to say that there aren't some good deals on good land on the east side of the Big Island, but you want to make sure you check it out in person. Of course, if your goal is to live off the grid and/or grow pakalolo (not that I would ever advocate such a thing), and a lava flow would be "no big t'ing" (there are some people who feel that way), then a $6,000 back-country lot might be exactly what you're looking for.

[Tiger Beer]

Originally Posted by HonuMan

Be careful where you buy, or at least know what you're looking for. My wife and I were thinking about getting one of those inexpensive, three-acre parcels between Hilo and Volcano, and eventually building on it. An old friend of ours, a retired Hilo realtor, advised against it. First, much of that really cheap land is in the high-risk lava-flow zone. Second, some of those lots aren't accessible except by four-wheel drive vehicle (i.e., no paved roads), and it can get very muddy and messy during rainy periods. Third, most don't have utilities. We figured that, by the time we move there, roads and utilities will be in place, but our friend told us, "Probably not." He said that, if the government puts in services and utilities, and they're destroyed by lava or resulting fire, then the government will be under pressure to reinstall them, if possible, which will be very expensive – whereas if they never install services in the first place, they won't be under any pressure. Fourth, a lot of those back-country lots are used by or are adjacent to land used by pakalolo growers, and they don't appreciate outsiders. Fifth, some are near pig farms or otherwise next to neighbors most people wouldn't want to live by.

That explanation certainly works for me!!!

Yeah, I was thinking of the 'eventually it'll all have gov't services', etc. But, considering the situation, it does sound quite unlikely that that would occur.

[OpenD]

Originally Posted by Tiger Beer

That explanation certainly works for me!!!

Yeah, I was thinking of the 'eventually it'll all have gov't services', etc. But, considering the situation, it does sound quite unlikely that that would occur.

If you look through the aerial maps of Puna on GoogleMaps or its ilk, you'll see lots and lots of ghost subdivision... places that were marked off for development in the 1970s, lots sold, dirt roads cut, but little else. Most of it is still off the grid. The only government services there are the black helicopters flying overhead.

[mdand3boys]

It depends upon what you are looking for. $6000 (and less) lots exist in some of the subdivisions right now. For example, Nanawale has many of them and the subdivision pays for the electric poles to be put in if they are not already to your lot (but only when you pull a building permit). Downside is that the lots are generally about 8,000sf.
Buy two and put the house in the middle. Or, buy two side-by side and the two that are side-by-side behind it. You then have access to the road behind your house with no worry about who might build right behind you. It is more common than you think.

[terracore]

Originally Posted by HonuMan

Be careful where you buy, or at least know what you're looking for. My wife and I were thinking about getting one of those inexpensive, three-acre parcels between Hilo and Volcano, and eventually building on it. An old friend of ours, a retired Hilo realtor, advised against it. First, much of that really cheap land is in the high-risk lava-flow zone. Second, some of those lots aren't accessible except by four-wheel drive vehicle (i.e., no paved roads), and it can get very muddy and messy during rainy periods. Third, most don't have utilities. We figured that, by the time we move there, roads and utilities will be in place, but our friend told us, "Probably not." He said that, if the government puts in services and utilities, and they're destroyed by lava or resulting fire, then the government will be under pressure to reinstall them, if possible, which will be very expensive – whereas if they never install services in the first place, they won't be under any pressure. Fourth, a lot of those back-country lots are used by or are adjacent to land used by pakalolo growers, and they don't appreciate outsiders. Fifth, some are near pig farms or otherwise next to neighbors most people wouldn't want to live by.

That isn't to say that there aren't some good deals on good land on the east side of the Big Island, but you want to make sure you check it out in person. Of course, if your goal is to live off the grid and/or grow pakalolo (not that I would ever advocate such a thing), and a lava flow would be "no big t'ing" (there are some people who feel that way), then a $6,000 back-country lot might be exactly what you're looking for.

The cheap 3-acre parcels between Hilo and Volcano are mostly in lava zone 3. It's no more "high risk" than Hilo is, so I'm not sure what he meant. There are a lot of them on or near pavement. Some of them ARE off the pavement, even a few miles can add substantial time to your commute and wear-and-tear on your vehicle. I've never seen a $6k 3 acre lot, a more realistic figure on the low end is 15k. The thing about the cheap lots is that they might be 3 acres, but only 125-150 feet wide and very long. There has been a guy selling two back-to-back 3 acre parcels on craigslist for over a year, and when you map them it looks like a landing strip. Even two side-by-side parcels is very narrow. Expect to pay 3-4 times as much for a square parcel (when you can find them) than for a spaghetti lot of the same acreage.

As far as "risks" go, I have seen lots that have been vacant since the property was first subdivided in the 60's and they look great. Other lots that had been bulldozed at some point and abandoned are full of invasive species. At the lower altitudes you have the threat of albezia trees quickly over running your property and then threatening to crush your neighbor's house or taking down power lines.

As far as utilities go, lots of cheap properties are right next to the power lines. It might take a few thousand to get them hooked up but many people prefer off grid because electricity is so expensive. Water falls from the sky for free, and sewer goes into the ground (like it or not). What other utilities are left, except phone, TV, and internet? The few areas that are truly outside of wireless reach- probably a temporary situation as technology improves but there are plenty of cheap properties available right now with full utilities except water/sewer. Personally I think the days of "the grid" are numbered- the many people living off it right now with all their modern conveniences intact would agree.

As far as insurance goes, I imagine you mean liability insurance. If you own a home, most homeowner's insurance automatically cover vacant lots you own. If you store anything on your land, and you have renter's insurance, then you are also usually covered. If you have neither, you can get an umbrella policy that covers you.

I certainly would never buy anything without seeing it (and the area) first. Some of the areas in Fern Forest look... well you have to see them to believe it. Other areas just a few miles away are truly wonderful. You could say the exact same thing about New York City.

[HiloDiver]

You also need to look deep inside and think if you really want to go through the homebuilding process 20 years from now. Including the expense of that. Unless you really want a brand-new you-designed home at that time, it will definitely be less expensive at that time to buy an existing home, even if you need to remodel it.

Vacant land is about as far from a liquid investment as you can get.

Editing to add that a former spouse paid something like $25K for some vacant land years ago, a 25 acre lot in the middle of BFE; by the time I met/married him and he took me to see it, I talked to him really seriously about what life would actually be like there, he agreed that we needed to sell it. It was on the market for 8 years and we finally got $8K for it...the only offer we ever had for it. He decided to just cut his losses and take the $8K. $8K was better than $0K.

[OpenD]

Originally Posted by DebbyDiver

a former spouse paid something like $25K for some vacant land years ago, a 25 acre lot in the middle of BFE

Ah, well... vacant land in Egypt has always been an iffy investment.