Buying land is always hot. Millionaire Real estate investors say the best time to buy land was five years ago and the next best time is today. But, before you go bringing out your cheque books, you need to understand the land business. Buying and selling land is good business if done correctly. The following are important pointers to help you determine where to buy land.
Establish what you want to use the land for
People buy land for different purposes like buying a house, for commercial use, land flipping, agricultural use, a recreational park etc. To help you get started, answer the following questions:
- Set a clear and concise objective for buying land. What do you need the land for?
- Determine the most suitable location for your chosen venture.
- Define the size required, boundaries and access to and from urban centres.
- Verify the title documents of the land. Choose lands with proper land documents.
- Acquire basic information about the area. Investigate the region and establish contact. Avoid lands with litigation issues and Omonile wahala.
- Identify the problems involved in acquiring the land and evaluate the risks involved. Identify possible solutions before moving ahead with the transaction. For instance, if you decide to invest in a land yet to be excised by the government, take into consideration the consequences should the government decide not to excise the land. All investments have a degree of risk. Choose your risks wisely.
- Distinguish between long-term ventures and short-term ventures. For instance, buying land for agricultural use is a longterm venture. Depending on what you intend on planting, it could take as long as five years to see returns on your investments. Land flipping, on the other hand, could reap a good return on an investment after a year or two.
- Think long-term. It is always more profitable to buy land where people will settle in three to five years from today. The challenge is, no one knows for sure where people may decide to settle in the future. However, they are predictive economic factors that could help determine where the next people will migrate to.
Once you’ve decided what you need the land for, do your research on the size required and the right location. For instance, if you’re looking to buy land to build a commercial building, you’d need to choose a location where businesses would want to pitch their tents. In the same vein, if you want to buy land to plant cocoa, the first thing to consider is choosing the location with suitable weather for growing cocoa.
Although, millionaire investors advocate for buying land, having a purpose for buying land is the first step in the right direction.
Determine the basic features of the type of land you need
To get the best land deal in the market, it’s necessary to take into consideration certain features like the following:
- The land resources, climatic conditions in the area, soil type and landforms. Coastlines in Lagos are prone to flooding during the rainy season. Before buying land, it’s important to examine the soil type and the nature of the land. Would you need to sand fill before building? How much clearing do you need to do?
- Examine and verify the survey plan. Ensure the land you want to buy falls within the coordinates of the survey plan. If you’re buying land in Lagos, verify the survey plan at the Surveyor General’s office at Ikeja to make sure the assigned purpose of the land is the same as your objective. For instance, if the land had been assigned for agricultural use only, you cannot buy the land if your objective is to build a residential building.
- Take into consideration the existing infrastructure. Is there any access to the highway? What is the distance to the closest urban centre?
- Consider the land tenure system in the locality and how it can affect your rights to use the land. There are certain areas in Lagos that require a buyer to see the Oba of the local town before buying land in the locality. Take all these into account when choosing where to buy land.
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Put your finances in order
Finances are a significant determining factor in determining whether or not you can acquire a property. It’s no use going through all the trouble in making sure the land you want to buy is a perfect fit if you don’t have the means to finance the project. The cost of land isn’t just limited to the cost of land per square meter. There are hidden factors that cost money and should be taken into consideration like the following:
- Gathering information and researching on the land in itself costs money. The cost of verifying land documents, the transportation cost of going for a site inspection and cost of inviting a surveyor to survey the land all costs money.
- Consider the cost of providing support services like clearing the land and paving a road. Some real estate companies bear the cost of clearing, fencing the land and paving an access road. However, in a case where these services aren’t provided, you’d need to determine the cost.
- Additional fees like developmental levy, survey fees and documentation dues may not be included in the cost price of the land. Before making a commitment, find out if there any extra fees and when and how these fees should be paid.