Evaluating Raw Land
14 Issues to Consider
Thinking about a land purchase? Here are some of the top issues for consideration. These are our concerns. Use this as a template to create one for your particular piece of paradise.
- Commuting distance from a major urban centre. Must be between half and one hour maximum.
- No water or sewer? We estimate that a water well and septic field will cost at least $40K to the develop.
- No power? You will have to rely on a site generator. Possibly a wind turbine. Maybe solar panels. Allow for $5,000 for the generator, $15,000 for wind power and $20,000 for solar.
- Dump site? If there are abandoned vehicles, equipment or structures on the site, then they will have to be removed, unless you don’t mind that kind of blight. Allow for a minimum of $5,000 to $10,000 for cleanup.
- Poor ownership structure, restrictive covenants and zoning. Nothing is more boring to read. Nothing is more important to understand as what you can do on the land. Read all these documents and make sure you understand them completely.
- Is there a creek or pond on the property. Beware of Riparian Area Regulations or RAR. These features are protected by law and are environmentally sensitive. Best way to think about them is as exclusion zones. Your plans for the land must take this into account.
- Is the property on a district maintained (4 season) road or not? If it is not maintained, then it may not be accessible at all during the winter.
- What’s the elevation of the property? Usually properties over 500 meters are very different climatically than their lower altitude cousins.
- What’s its orientation to the sun? South facing is all important, especially with a slope. North facing with slope are the least desirable.
- No cell service? For us that would be the fatal flaw and immediately removes this listing from further consideration.
- No internet service without using slow old school satellite dish? Not a fatal flaw but can you or your business prosper with limited bandwidth?
- How far is the property located from a paved road. Our criteria is that it should be no more than 5 km to 10 km.
- Banks hate raw land. Financing will be difficult, compared to a house in the city.
- If you plan to hold and flip, be patient. It may take a year or longer to receive an acceptable offer.
Land ownership is important to many Canadians. It is empowering to go through the pioneering effort to develop a site into a family home site. Be sure to do your due diligence, be realistic with what you can do yourself and most importantly know if your bank account can support your dream.