Know the Costs Involved
Real estate is an investment of time and money -- and the more time you spend preparing, the more ready you'll be to spend your money wisely. What kind of expenses can you expect to incur when buying a vacant lot? At some point during the purchasing process, you might want to consider title insurance. It "protects owners and lenders against any property loss or damage they might experience because of liens, encumbrances or defects in the title to the property" [source: Stewart.com]. Consider it your shield against legal complications involving your property. While title insurance isn't necessarily required during a property transaction, if you apply for a bank loan or a mortgage, the financial institution may recommend you purchase title insurance to protect their investment and your own [source: Mortgage Professor].
Another potential cost to consider: a land survey. It's possible you won't need a survey done on land you're interested in buying. The land could have been recently surveyed, and with a little legwork you should be able to find out if and when a survey's been done. We'll get into surveying in-depth later on, but keep in mind that you may need to hire a professional surveyor to chart out the boundaries of your property. Because surveys vary based on location and a host of other factors, it's hard to give a general estimate of how much one will cost [source: Leslie and Associates].
Finally, remember that utilities and building costs will be expensive. In some cases, you may have to pay to have electricity and water run to your house before you even begin monthly service fees. On some land, you'll have to drill a well or install a septic system alongside home construction. If you're buying a piece of land as an investment, you'll bypass quite a few of those headaches.
But no matter what kind of property you've got your eye on buying, you'll want to know exactly what kind of government zoning restrictions are in place. We'll discuss those next.