Buying vacant land?

Anyone got thoughts, experience or advice on buying vacant land away from where you live? We’ve been toying with the idea of getting land up North, Benzie or Leelanau county’s for those familiar with the greatest state in the union. The intention would be to get somewhere (2-8 acres) while prices are still depressed, with the plan to build 20 years down the line. Searching Zillow and various MLS sites, there are a surprising number of places, many in planned subdivisions which may have a requirement to build in a certain time frame or not.

The thing is, I don’t know any realtors up there, or people who have used one in many many years. So we’re looking blind.

How to start? Pick a realtor at random? What to ask? Perc test, access, taxes?

Basically I’m clueless but this may be the only opportunity we have. We’re heading up for the weekend in a few weeks and would like to have a list of places to at least look at by then to compare on line pics and maps with reality

Thoughts and pointers?

Thanks as usual.

Keep an eye out for restrictive covenants, zoning and other municipal/county surprises. Check on acreage needed for septic (if city services not available), well rights... That's the kind of stuff we've run into shopping on the other side of the lake.

Everything stated above plus have cash in hand to do the deal. Getting financing on vacant land can be a huge pain. You're looking at giant chunks down and much higher rates on top of that. Both times I've bought vacant land (in Michigan as well) its been well worth it for me to take a home equity loan out to pay for the land and then just pay it off over a few years.
Part of the reason you find so much land like that for sale is the gigantic pain that financing is, and how few people that want that land have either the cash or the equity in something else to make it happen.
One thing to check into as well is building restrictions at the county level on minimum square feet. Quite a few places in that part of the world decided that they had enough camps in the woods already and set it up so you could only build a house. Quite a big house at that.
Edit to add that we've always had the best luck checking for land online to get a feel for what we want to look at. Then find a realtor that can show you those two or three pieces. By the time you're done with them they can usually suggest other pieces that are close to the one that you liked best. Realtors like to talk and really want to sell you stuff for the most part.

I would think buying a clapped out house or cabin and remodeling it is easier than starting from scratch.

I bought a book as I have a dream to live in Door County, Wisconsin. It covered all the bases - maybe there is a book on northern Michigan?

http://www.amazon.com/Your-piece-peninsula-reference-property/dp/B0006QZ34G

Look closely at the land itself, the neighbors. Empty and seemingly unowned land effectively becomes the neighbors yard, or their dump. The more years of this that goes by, the more entrenched the mindset. It can make it quite interesting for you in the future when you attempt to move onto "their" land. Depending on what they are dumping, it can make it quite interesting for you while you're an absentee land owner.

Look also at the state/county/town master plan. A highway bypass planned for your land will not be nice. Same a strip mall or whatever. Governments have a habit of looking at empty land as easy pickings, because they are.

Check with your tax guy and your insurance agent before you buy. Vacant land is totally different than property with a house on it.

Thanks for the advice all. a couple of clarifying points. Yes this would be a 100% cash purchase if we do it, no need for financing. Lot's and land west of Traverse City can be found for $2-$10k an acre.

Very good point on minimum Sq ft. Neither of us like or need big houses (Pole barn is another matter ) I hate McMansions. Having said that this wouldn't be a 500 sq foot cabin either. The intention is ultimatley a retirement home.

Datsun310guy. We don't want an old shack for a couple of reasons. First, I ASSUME that property taxes are much lower on vacant property, or with just a barn. Second I don't want squatters or the hassel of having to demolish a falling down places in 20 years

Also We'd love to go to Door County as well, we've spent 4-5 summer vacations there over the last 13 years, but it is more expensive than Leelanau and the other side of the lake. My wife's family are all originaly from the Chicago area so some of them have come up to join us in the past when there.

Back to searching on line I guess, it's actualy harder than you think looking on line to get a good idea.

Thanks all, keep it coming.

I've heard of bad things happening to rural properties owned but not occupied. Most of these involved vandalism and robberies of items contained in houses, which you would not have. Still, the concerns raised by foxtrapper are relevant and worthy of consideration. Best to buy in an area that you are familiar with, or have trusted friends in that area that can make recommendations.

Adrian_Thompson wrote: Very good point on minimum Sq ft. Neither of us like or need big houses (Pole barn is another matter ) I hate McMansions. Having said that this wouldn't be a 500 sq foot cabin either. The intention is ultimatley a retirement home. Datsun310guy. We don't want an old shack for a couple of reasons. First, I ASSUME that property taxes are much lower on vacant property, or with just a barn.

On the barn note, make sure you can build a barn/pole building before the house. Most of my experience is in the southern U.P., but there are a number of places They won't let you do that without a special exemption which may or may not be very difficult to get. Again, it's to prevent people from building camps instead of houses. I know that zoning is useful and all, but by god does it make you realize how limited your options can be on land that you think you own.

When I went to get financing for some hunting land, the credit union told me I needed 20% down. That ended that.

Rental properties out in the country are very high in demand right now. You could buy a property that you may not want to live in, but someone else would.

Your best bet in rural areas is to aim for one or two acres. I've never heard of a rural municipality having a minimum lot size of less than an acre in Ag Zoning.

Get the most amount of frontage you can, frontage is worth money. Frontage may allow you to subdivide again if you have 2x+ the minimum lot size. I have many folks who come into my office wanting to subdivide on 150' of frontage, but their house is smack in the middle of their lot. They usually end up with a property line right next to their home.

Our county health department charges $300 for septic soil perk testing. They will advise you on your other options if not approved for a septic system.

You'll have a very hard time building a pole barn (accessory building), although some municipalities are easier to work with than others. You may want to call the local municipal office and ask them what your options are.

I strongly suggest that once you find land go visit the county to see if there are any restrictions. When we bought land we did this. The first two places we put offers on had large sections of wetlands. You could tell by looking at it but it really limited what and where we could have built.

the wife and I just purchased 3 acres this spring. The land had no home or other structures on it. The land was an old farm that a developer was in the process of putting a neighborhood on, when the bottom of the market fell out, and the developer defaulted and went bust. The land was owned by the banks, who is not in the business of owning land, and therefore the prices were unreal compared to lots of a similar size for sale by owner.

This land already came with a tap into the municipal water system, electric, phone and cable is ready for use, and the EPA has approved the site for septic. No gas in this neighborhood, so we will likely bury a propane tank. Knowing these things made the decision to buy easier as it answered a lot of questions before we had to ask them. There is a covenant in place, but its mostly things like timeline to build once ground is broken, minimum setback from the road etc. But nothing stating what kind of fence or the size of shed or any HOA Nazi stuff...its pretty lax.

We do have to build over 2500 ft^2 if its a ranch, and 3kft^2 if 2 story, but basement counts if you rough in for a bathroom, regardless of if you actually finish it (which we plan to do, but I want to do it myself in cash to build equity down the line without financing).

Here in Ohio, not many banks are willing to loan money for just land, since it doesnt appreciate like a lot + a new house on it. The credit unions will, but their rates arent great. Huntington bank was who we went with in the end, as their rates were better, with decent terms. We did have to stay on them a little to get things done on time, as the agent we were working with seemed a little scattered (but thats likely just a personal anecdote, may not be indicative of their overall business practice).

We are lucky in that there are a half dozen other new homes on other lots in the subdivision, so its pretty clear the neighbors are interested in keeping the area nice - Im not too worried about people dumping or anything there.

We plan to build in 1-3 years, once we can save more toward a down payment, and the market improves so we can sell our current home. We plan to use Huntington for the construction loan too. When the time comes, we have a few options. We can use all cash for a down payment. Or we can hope that the land appreciates since it was sold to us at the bottom of the curve, and new homes are in the area now, about 5 more since we purchased. If our equity in the land (the remainder of the balance on the mortgage on the land subtracted from whatever the appreciated value of the land is at that time) plus what cash we save = 20% of the construction loan, we are green lighted.

Luckily, there is no timeline in the covenants stating how long we have to build. It can stay barren for all eternity, so long as we bush hog twice a year...so we dont have to build until we are ready. We have been tossing around the idea of selling our home now (likely would break even after realtor fees and closing costs etc), and move into a rental home for a year, and maybe save more cash since it should be less than our current mortgage on the home we're in.

Anyway, do the math, check all the options - like others mentioned, check about utilities, zoning, septic/sewer, HOA/covenants, local civil planning. Im sure there are about a million other things Im missing. Im sure there are other things youll have to take into consideration giving that youre plan is not to build in a few years, but perhaps a few decades. Good luck. Owning acreage really is a great feeling. Makes me smile just thinking about my land. I think its a wise investment in the long run...its the one thing theyre not making any more of.

Adrian_Thompson wrote: Neither of us like or need big houses (Pole barn is another matter ) I hate McMansions. Having said that this wouldn't be a 500 sq foot cabin either. The intention is ultimatley a retirement home.

I'll be glad to design it for you. And you, 4cylinderfury.

My uncle owns a piece of land in Florida. Has for as long as I can recall. Whenever someone is in the area, they drive by and check on it. This has been going on for like 25 years on various business trips and family vacations. IMHO, that's a long time to pay taxes on something!

Duke wrote:

Adrian_Thompson wrote: Neither of us like or need big houses (Pole barn is another matter ) I hate McMansions. Having said that this wouldn't be a 500 sq foot cabin either. The intention is ultimatley a retirement home.

I'll be glad to design it for you. And you, 4cylinderfury.

Id gladly take you up on that offer, except for the fact that, while the wife graduated college with a degree in marketing, she shouldve gone into interior design, because she excels at it in ways that remind you of a baby bird taking flight...its just a natural skill that simply is known, not learned. Shes been "building" our forever home in her minds eye for over a decade. We have a 3" binder stuffed to the gills with drawings, design ideas, kitchen layouts, interior and exterior elevations, floorplans, materials spec sheets, builder references, etc etc etc ad infinitum. Its not a matter of which house, its a matter of which builder can build the house we already have

Find a few towns you like and get on their mailing list for when they have tax sales. Lots of land to be had for cheap. Hit or miss on quality.

My wife and I love that area of Michigan. Some friends of ours just moved to the west Traverse area.

I don't have much input on the specifics of the ins and outs on the buy, other than to say I agree with your assessment that it's an absolutely gorgeous area of Michigan, and prices are stellar right now.

Do a lot of research before you buy. Fifteen years ago a friend of mine bought 4 acres up in the mountains west of town. His intention was to build a house when he retired.

About 10 years after he bought the land the county changed the zoning from agricultural to conservation. The problem is that under the agricultural zoning he had to have 2 acres to put in a septic system, but under the conservation zoning you have to have 5 acres for a septic system.

So now he owns 4 acres of land that he can't build a house on.

Hal wrote: Do a lot of research before you buy. Fifteen years ago a friend of mine bought 4 acres up in the mountains west of town. His intention was to build a house when he retired. About 10 years after he bought the land the county changed the zoning from agricultural to conservation. The problem is that under the agricultural zoning he had to have 2 acres to put in a septic system, but under the conservation zoning you have to have 5 acres for a septic system. So now he owns 4 acres of land that he can't build a house on.

you can always petition the board for a variance. It may cost money though as often variances for septic require an EPA investigation thats often the owners responsibility to obtain (pay for). Where I live, its $1300 for an EPA septic report. It could be significantly more though if there are conservation efforts involved.

Around here, property has to pass a 'perk test' to be able to put in a septic tank. If it won't perk, no septic permit thus no house. There are also restrictions on the number of bedrooms which is also tied to the perk test, that means there is some property that can be had dirt cheap but that's because it's not developable.

I recently saw a pretty nice piece of property on a 'point' on the lake down here but it was restricted to a 2BR house. That means the McMansions are out, but it's also restricted against mobile homes. Another big deal down here is dock permits and that particular piece of property can't have a dock built so between that and the house size restriction it kills the value. For the right person that would be a helluva deal, but resale could be tough at best.

4cylndrfury wrote:

Hal wrote: Do a lot of research before you buy. Fifteen years ago a friend of mine bought 4 acres up in the mountains west of town. His intention was to build a house when he retired. About 10 years after he bought the land the county changed the zoning from agricultural to conservation. The problem is that under the agricultural zoning he had to have 2 acres to put in a septic system, but under the conservation zoning you have to have 5 acres for a septic system. So now he owns 4 acres of land that he can't build a house on.

you can always petition the board for a variance. It may cost money though as often variances for septic require an EPA investigation thats often the owners responsibility to obtain (pay for). Where I live, its $1300 for an EPA septic report. It could be significantly more though if there are conservation efforts involved.

He already tried for a variance and got turned down. Tried an appeal and got turned down again.

Right now he is trying to sell it to one of the neighbors but they don't want to give him even what he paid for it 15 years ago.

Hal wrote:

4cylndrfury wrote:

Hal wrote: Do a lot of research before you buy. Fifteen years ago a friend of mine bought 4 acres up in the mountains west of town. His intention was to build a house when he retired. About 10 years after he bought the land the county changed the zoning from agricultural to conservation. The problem is that under the agricultural zoning he had to have 2 acres to put in a septic system, but under the conservation zoning you have to have 5 acres for a septic system. So now he owns 4 acres of land that he can't build a house on.

you can always petition the board for a variance. It may cost money though as often variances for septic require an EPA investigation thats often the owners responsibility to obtain (pay for). Where I live, its $1300 for an EPA septic report. It could be significantly more though if there are conservation efforts involved.

He already tried for a variance and got turned down. Tried an appeal and got turned down again. Right now he is trying to sell it to one of the neighbors but they don't want to give him even what he paid for it 15 years ago.

I'm sure he can have a septic system, but it will have to be engineered. That means $$$$$. They do that out at the lake near me, anything under .5 acres has to have an engineered septic system. Most lots out there are .25 acres. I'd do some checking and see if an engineered septic system or an aerobic system would be acceptable.

Sometimes the opposite can happen: down Charleston way, there was a bunch of land near Daniel Island which had too high a water table to perk properly and thus the land was dirt cheap. People were buying the non perking property for hunting etc, there was a big sand mine too. Then the city built a big sewer line, the price of the property exploded overnight.

I'm not super-familiar with the Leelenau area, but if it's as sandy as, say Muskegon County, with which I am familiar, I can't imagine there being any perk issues on property there, especially if it's not too close to a lake. But, best to check, though.