Buying raw land can be an incredible opportunity but like all real estate acquisitions - it can get pricey, which is why you want to get the best deal possible.
To get a deal when buying raw land you should be sure to choose the right location, conduct a thorough analysis of the property, and be aware of easements on the land. Once you have carefully assessed the property’s qualities, you can negotiate a good deal for the raw land.
When most people are on the hunt for buying real estate, they often overlook buying raw land. These properties can undeniably come with more work and more risk, but if you are willing to put in the time and effort, you would be surprised by some of the incredible deals for raw land parcels that are out there. With that being said, to get a great deal on raw land, you must be calculated with your decision-making. There are plenty of raw land options on the real estate market that have incredibly low price tags but they ultimately lack any legitimate value. To help you understand this further, we are going to highlight the key features you should look for when assessing raw land parcels so that you can get the best deal possible on your land acquisition.
After decades of working as a real estate investor, I have had an extensive amount of experience dealing with raw land purchases. My experience has taught me that the best way to get a deal when buying raw land is to be thorough with your inspections and to weigh out all variables of the property carefully before making an offer.
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Getting A Deal When Buying Raw Land
The United States currently has millions of acres of raw land that are scattered around the country in either the hands of private sellers or state and federal governments. Properties on the market that are advertised as ‘raw land’ are often some of the most affordable pieces of real estate that you can purchase. The reason for this is that raw lands do not have any type of development or financial investment behind them, which means that they are essentially untouched properties.
These qualities often lead to many real estate developers and investors being uninterested in pursuing projects on raw land parcels, which drives the price of these properties down considerably. A wise buyer who is looking to get a deal on real estate should take advantage of the raw lands that are out there, as they can be quite the bargain if you are able to spot worthy prospects.
The most important thing that you want to bear in mind when assessing raw land is that a lot of these properties are cheap for a reason. Raw land often lacks a lot of the key features that make property acquisitions a feasible and favorable investment opportunity. While the low price may attract a lot of attention at first and it may seem like the deal of a lifetime, you should approach raw land parcels with caution and consideration.
At the end of the day, getting a real deal on raw land is going to take some footwork and research from your end. You should know exactly what features to look for in the property so that you can make a decision that is going to benefit your goals for the property - regardless of whether you are looking to flip the land or pursue a long-term development project. Keep reading to learn everything you need to know about getting a deal when buying raw land.
If you have had any experience dealing in real estate before, you will know that location is everything. This is hands down the most defining factor for the price of a property and it is very much the case for raw land.
It goes without saying that the more attractive the location of a property, the more expensive you can expect the value of the land to be. This is often the reason that raw land parcels are so cheap, as they are generally located in a place that is not ideal for development.
With that being said, the perceived ‘poor’ location of raw land can also work in your favor, which results in you getting a great deal on your land acquisition. There are certain location qualities that you should be aware of when assessing raw land parcels to help you determine whether the property has potential or not.
Understanding these qualities can make all the difference in you getting the potential deal of a lifetime on your raw land purchase. However, overlooking these essential location qualities can result in a complete waste of time and money, which is why you are going to want to be as thorough as possible when considering the location of your raw land.
The first and foremost feature you are going to want to look at is the surroundings of the raw land. Raw lands come in all shapes and sizes and they can be located in a wide variety of different areas.
If the raw land that you are looking at is in the middle of the desert with no attractive surroundings, you will likely have an incredibly cheap property on your hands. If these are the location qualities that you are looking for, then your search may end up being very easy and you should not have an issue getting a great deal on your real estate purchase.
However, if you want to get a deal on raw land that is more dynamic, you are going to want to take a more careful look at the surroundings of the property. More often than not, real estate that is located near an urban area will tend to have a higher price tag, which will apply to raw land as well.
While this is a common trend, you would be surprised by how cheap some raw land parcels are that are located on the outskirts of cities and towns. If an urban area is expanding and thriving, then you should expect raw lands that are outside of these areas to start increasing in value over the years. What you are going to want to do is get in on the deal before everyone else by acquiring the raw land before other investors hop on the opportunity. This is especially a great approach for individuals that are hoping to buy land for financial returns rather than personal development projects.
In addition, there are some immediate qualities that you should assess when considering the location of the raw land. You will find that properties that have a beautiful natural aesthetic will tend to be more attractive for future buyers, which is why you should look for the following qualities in the surroundings of the raw land:
Depending on what your intentions for your raw land are, properties that have these kinds of natural qualities in their surroundings can indicate a great deal on your purchase. Future buyers will always favor properties that have beautiful natural surroundings and it can ultimately be a huge selling point if you decide that you want to sell off your land.
The trouble with raw land parcels is that they can often be located in an area that is incredibly difficult to reach. The lack of accessibility to these properties is a big reason that their price can be quite low. Depending on how you plan on using your land, this can be a huge boost in getting a good deal on your raw land.
If you do not plan on pursuing any kind of commercial or residential development on your property, then the poor accessibility of the raw land is really not a major issue and it can result in you having some very cheap land options to consider.
With that being said, there are plenty of raw land properties that are easy to reach - yet they still retain a reasonable price tag. When you assess the location of raw land parcels, always look for properties that are easier to reach, as getting your hands on one of these for a good price can end up being a great deal for you.
Good accessibility is especially important if you plan on doing any kind of building on the land. The reason for this is that getting onto your property should ultimately be practical and straightforward - the fewer hoops someone has to jump through to get access to your land the better.
In addition, good accessibility also means that you are going to have an easier time getting utilities connected to your property. This is also an essential factor for development projects, as you cannot have a realistic build without having access to the following utilities:
If you are able to find a good price for raw land that has relatively easy road access and is capable of being hooked up to utilities, then there is a lot of promise and potential for the property, which will indicate a good deal on the land.
Property Condition & Qualities
Once you have determined the location of the raw land, the next thing you are going to want to assess is the condition of the property. The condition of all raw land parcels should have some similarities - untouched and unaltered by human activity and development.
However, there are some land characteristics that can often affect the value of the land that you should be aware of. We have already covered the surrounding qualities of raw lands that you need to assess but you should also take the same approach for qualities that are on the land itself.
In addition, raw land parcels can greatly increase in value if there are resources worth harvesting on the property. These would include resources such as:
- Natural Gas
- Nuclear Energy
The challenge with spotting these resources is that they are beneath the surface and cannot be easily identified. If you want to confirm whether there are any resources on the raw land, you should hire a geologist to come to inspect the property. In the chance that you are able to find resources on the raw land and get a good price for it, you may have a great deal on your hands.
In addition, you should also confirm the fertility of the raw land’s soil. Soil is one of our most precious and valued natural resources, which can present a lot of opportunities for potential businesses such as farming operations. To determine whether or not the raw land has soil that is worthy of food growing, you are going to need to conduct an environmental impact report.
Hiring a professional, to assess the condition of your soil is going to be a must if you plan on pursuing any kind of farming on your raw land. Soil fertility can end up being a huge selling point for you or for future buyers, which can result in a great deal on raw land - if the price is right.
With that being said, you are going to come across a lot of raw land parcels that do not have these attractive qualities and may be in poor condition. While this may be a reason to abandon the prospect of acquiring raw land for some buyers, it can actually be a dealbreaker for others.
If you do not have the intention of pursuing development projects, harvesting natural resources, or farming on your raw land, then acquiring a property in poor condition with unfavorable qualities can end up being a very cheap investment opportunity.
Something that you are going to want to be very careful with when considering raw land parcels is any potential easements that are attached to the property. An easement is essentially an agreement to the developmental right(s) that a landowner has relinquished of their property. Ultimately, easements can influence the cost of the land and the quality of your deal.
It is often the case that an easement involves a very basic agreement between a landowner and their neighbor or the United States Government. Some common easements would include the shared maintenance of a fence/border or the right to have a public access road pass through your land. These easements are not overly invasive and will generally not affect the value of the land too much.
On the other hand, some raw land parcels have ‘conservation easements’ in place, which can greatly affect the monetary value of the property. Conservation easements are established to protect the environmental qualities of the land for things such as wildlife and habitat or natural resources.
Raw lands that have conservation easements on them generally can have a very limited (or none at all) amount of development that is allowed on them. This means that pursuing builds for commercial and industrial use or even farming is often out of the question. In addition, you may only be allowed to build a modest residential development, which is also restricted to specific standards and regulations such as the size of the home, its placement, as well as the number of borders and fences that the property has.
Many aspiring landowners, developers, and investors are often drawn away from buying raw lands with conservation easements given that they can be so restricted in how they can be used. With that being said, buying raw lands with conservation easements on them can actually be a great deal.
While you may be limited with what you can build on the property, the price tag for raw land parcels with conservation easements is staggeringly low. The value of the land is often a fraction of what the original cost was - with many landowners acquiring raw land with conservation easements at 50% below market value. This can result in your raw land purchase becoming a deal too good to pass up on.
In addition, raw lands with conservation easements usually have a beautiful natural aesthetic, as the property has been preserved to protect its natural qualities. The most important thing you should be aware of is that the terms of the easements do not interfere with your goals for the raw land.
Lastly, one of the best ways to get a great deal when buying raw land is to be a good negotiator. If you have thoroughly assessed all of the qualities of the raw land that you are considering, you should have been able to determine the overall value of the property.
With all of your inspections finalized, you will be able to come to a realistic figure for what the land is worth. The more thorough your initial inspections, the more likely you will be able to get a solid deal on the raw land. If you are unsure, you should always hire an appraiser to get a second opinion.
You must leave no stone unturned before you begin negotiating with the seller. The last thing you want to find out is that there were some negative factors that you overlooked when assessing the land.
You can then offer the seller a fair price for their raw land. However, you may be able to get a better deal for the raw land by being an aggressive negotiator. By pointing out legitimate flaws in the land during your negotiations, you can utilize this to drive the price of the property down to get a better deal.
About THE AUTHOR
Brittany has been in the land business since 2020 when the world was starting to shut down because of COVID-19. Since then, we’ve sold to dozens of people from ATV weekend warriors to camping enthusiasts to retired truck drivers. Our inventory spans mostly in the western United States. We’ve been trained by experience, land acquisition courses, and hundreds of hours meeting with county assessors and clerks, zoning officials, realtors, and land investors. We’ve answered hundreds of questions from people regarding the buying and use of land.Read More About Brittany Melling