The biggest hurdle most first time land buyers have to overcome is the fact they don’t have a clear idea of what exactly they’re looking for. They may have a general location in mind, but that’s about it. What often happens is the person gets overwhelmed by the number of options available and something called “analysis paralysis” sets in, leading to inaction, frustration, and disappointment. If I’m hitting a little close to home with this, don’t worry! We’ve all been there, and today I want to help you develop a list of criteria for buying land. A clear set of criteria can help narrow your search and get you closer to buying your dream property.
Get on the same page first
First things first. You’ll want to make sure that whatever buying criteria you develop is what everyone can agree with. If it’s just you buying land, then this is straightforward. However, if it’s you and your significant other, a friend, or a business partner, you’ll obviously want to make sure they’re involved in developing this criteria and they agree with the final list.
Keep your buying criteria flexible
Let’s talk about a couple things to keep in mind when putting your buying criteria together.
First, your buying criteria should have some clear standards, but it shouldn’t be a straitjacket. Buying criteria that is too strict and specific, rather than helping you narrow your options, can mean you end up with no options. Bottom line? “Don’t let the perfect be the enemy of the good.”
Second, your buying criteria should be a living document. If it’s your first time buying land, this is especially important to keep in mind. Your initial buying criteria may be too loose or too strict, and you’ll only figure this out the more you shop around. Take what you’re learning from the marketplace and either relax or refine your buying criteria accordingly.
Your buying criteria
Ok, now let’s get down to business. Your buying criteria can be any number of standards you decide on, but here are a few I think everyone should have to get started:
- Location: Choose the county/counties where you’d like to own land. You can get more specific by looking at a specific subdivision within a county.
- Land Use: What’s your plan for the land? If you’re looking to build a future home there, is the property zoned for residential use? If you’re looking to camp or bring your RV, can you do that? Are you ok with a Homeowner’s Association or do you want to avoid any HOA/POAs?
- Budget: Look at land for sale in the area where you’re thinking of buying and get a feel for what cash prices are like. If cash prices are higher than what you have in your budget, that’s ok! Think about buying land on terms (paying it off monthly over the course of maybe 2-6 years): that’s how most land sales are done in the United States. It’s a good idea to have both a cash price budget ($4-8k for example) and a monthly terms budget ($125-$300 p/m for example).
- Accessibility: You probably want land that is directly accessible by a road. You probably don’t want land where you have to get permission to go through someone else’s property to get to yours. Are you ok with a dirt road or would you prefer paved road access?
- Infrastructure: Are you ok with off-the-grid property or do you want land that has power and/or water infrastructure already in place? Off-the-grid property is of course much cheaper than improved property.
You can certainly expand this list to include other key criteria that matter to you: mountain views, within 20 miles of the nearest Walmart, etc. The above five criteria will usually be sufficient to at least get you started. Just remember to keep your list flexible and adjust it as you explore the land marketplace.
Let us help you!
We’re happy to help you build your buying criteria. Our specialty is Costilla County, Colorado, but we’re land investors and can point you in the right direction in other markets too.
At Ocala Road, we regularly see land opportunities across the United States come across our virtual desk, so if we know your buying criteria we can connect you to any opportunities we come across. Reach out to us anytime – this is what we’re here to do!