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Due Diligence What a Buyer Needs to Know Before Buying Land

Gregory Akerman
 


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In times of economic uncertainty, which is unfortunately the time that we are currently in for most of the world, the best place to put your money is into something that will always hold some value. Stocks in publicly traded companies are not optimal at this point in time because company stocks can go from dollars per share to pennies per share in a single trading day if the worst happens and a stock market crash occurs. However, there are certain things within the economy that will always be of value. Rare metals such as gold and silver will always have value, as will land because it is the one thing that everyone absolutely needs to sustain themselves. If you are interested in purchasing land however, here are some things you need to know.

Area

The first thing that you need to know before you purchase the land is the exact area of the land. In the current day and age of modern technology, it is possible to pinpoint with perfect accuracy the location of a particular plot of land. You can do this yourself with a handheld GPS device if you wish, but it will look more official if you get a licensed prospector to do it instead. Once you know the exact area and location, then you can use that information to determine whether the deal you are being offered is a good one.

Taxes

One of the saddest things that happen far too often is the repossession of land because the owner of that land reneged on the taxes that they have to pay for it. Most of the time this has nothing to do with ability to pay either, but rather an ignorance of the tax law in the particular area. There is nothing worse than purchasing a plot of land only to have that plot of land taken away from you because of taxes that you did not even know you had to pay. Due diligence requires that you understand the tax laws before you purchase so that you know exactly what you are getting into.

Zoning

Another thing that you need to know about land before you purchase it is zoning. Zoning is actually a two-part body of knowledge. The first part has to do with the general zoning laws for your particular area. Each area has general zoning laws that apply to every parcel of land purchased within that area and these zoning laws set out in very specific terms what can not be done with the land that you purchase. If you purchase land to hold as an investment for example, you need to make sure that the zoning laws in that area allow such things to happen.

Another zoning facet that you need to know is the specific zoning regulation for the land that you wish to purpose. In most cities and regions, there are specific zoning regulations for specific tracts of land in addition to the general zoning regulations discussed above. These specific regulations define what a piece of land can be used for and therefore are quite important in your final decision.

For example, if you purchase a piece of land because you want to build a shop on it and then find out that the land is strictly zoned for residential use, you are out of luck unless you can sell the land again. Land purchasing is currently a buyer's market in most places in the world, so make sure you understand specific zoning regulations so you don't make that mistake.

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