Whether you are from the rural Midwest or the urban Northeast, the dream of owning a home is consistent across generations. Unfortunately, due to COVID-19, the current housing market has a home shortage. So, what do you do when you are searching for a home and none quite fit your needs? In the land of opportunity, you can build your own! Design with Frank is here to walk you through the details of buying, financing, and prepping land for building.
Where to look for land to purchase?
The first thought that will come to your mind after deciding to build a house is: where will you find the land? There many ways and sources one can opt to search for a plot, according to their requirements. For example:
- Personal approach
- Real estate agents
The most common and easy source of finding the land for building the house is the internet, through related websites. Some of them are as follows:
All these websites provide the lands for building houses on them. You can check them out and look for the one which will suit you.
What things should you consider in a suitable plot of land?
Choosing land is never as simple as just going for the one that looks nice. It requires careful consideration.
Choose a specific area. Explore that area by yourself and talk to the locals. Introduce yourself to neighbors, grab a bite while you are in town and chat with business owners. When you buy land, you are not only investing in the land, but you are also investing in the community surrounding that land. Keep in mind the requirements you have of the environment for your home while you explore.
Look for the availability of facilities according to your needs in that area. There should be easy access to:
- Gas stations
- Job location
- Shopping Malls
These facilities will help you to maintain your standards of living without facing problems. Recognize that the kind of community the land is in will impact the accessibility to these facilities. Rural living comes with lots of land at a relatively low cost, but the nearest hospital might be an hour drive.
You have to check what are its soil conditions, for example.
- Sandy soils: They rarely cause foundation problems. As water passes through sandy soils rather absorbing in it. And it expands when it absorbs moisture and when it is dry out its contracts. Sandy soils have good load bearing qualities.
- Clay soils: It has the greatest potential to damage foundation because it absorbs water easily and expands itself in volume and get saturated. This can make foundation to crack, heave and shift. And when it shrinks, it leaves gaps around house.
- Sandy Loam Soils: It’s a very stable soil. It shows affects with the increase or decrease of moisture temperature. But the problem is when this soil gets erode than it became less able to sustain the weight of foundation.
Why is it important to know the zoning requirement?
When you are considering the plot, you should be aware of zoning requirements.
- Zoning has its impact on the type of house you want to build.
- Residential zoning does not encourage the development of industries.
- Zoning requirements of that zone will let you know about the policies regarding allotment size, building height, style, setbacks.
- It influences the most efficient and effective use of the building and land.
- If the zoning does not permit, storage facilities and other construction is not possible.
- Placement of trash area maybe limited.
- These restrictions affect numerous issues to include if pets and certain vehicles are permitted on the land.
The primary concerns with zoning matters to look for regards spacing and size. These conditions are often in the purchase agreement or legal documentation. The planning or specific terms are often statements given by the local, city or state regulations and officials. Design with Frank offers a Discovery Blueprint Package to mitigate the permit process with the local zoning department.
What will be the cost of building on the land in the future?
The cost of the land will be affected by the facilities on that land. The more the facilities will be, the higher its price will go.
If the land is on a highly accessible road, that is a plus. Not having a place to park your car is inconvenient. To install a driveway will be time-consuming and costly for you because you will have to build your own driveway. Already having driveway will save you time as well as money — driveway installation can cost you between $1 to $50 per square foot. On average, you will likely pay between $2 to $15, which does not sound too bad. However, for a 1,000 square foot driveway, that will add up to around $50,000 in total.
On-grid and off-grid
On-grid and off-grid systems also contribute to fluctuations in price. Electrical on-grid systems are costly to set up, but not as much as off-grid. If the land cannot access these grids, the money to set it up will come out of your pocket. For off grid setups, use a Telsa battery or solar panel system to generate electricity. You will need these five main parts of an off-grid system:
- Battery inverter/charger or multi-mode hybrid inverter.
- Solar Inverter (AC) or MPPT solar charge controller (DC)
- Battery Bank
- Solar panel
Sewer and Septic systems
A proper sewer or a septic system is a necessary for your home. If the land does not have proper sewer systems, you must spend your own money setting them up by yourself. This process will not only be time-consuming, but it will also be costly — it will cost roughly $3,500 to $10,000, but the price varies on location. You will be saved from all the troubles of setting it up if the land has a proper sewer or septic system beforehand. If you do not intend to connect your house with the national system, you can set up a Greywater system.
For any property you need to plan for septic system, it requires leach or drain fields. After that you need to have “perc test.” It determines the water absorption rate of soil in preparation for the building of a septic drain field or infiltration basin. A local contractor can give you estimates closer to the cost based on location, and the Frank team can help you figure out how to crunch all the numbers. All in all, it can become very costly before you have even started building!
How should you pay for your land?
Financing is often the biggest challenge of buying land, but it should be the first box you check off. After all, you need a way to pay for your new home.
Make your way to the bank to take out a mortgage or land loan as well as a construction loan. Since your lot will one day have a home on it, it is possible to use a home loan to pay for your land. A mortgage typically offers more, which means more finances to pay for building. Something else to note is that the cash down for land loans is between 20% to 30% of the total cost, but it comes with lower risk than a mortgage.
In addition to your land loan, a construction loan functions pretty similarly to a land loan: short-term and high-interest. There are various kinds of construction loans, but the best kind for building a home would be a construction-to-permanent loan. All in all, your construction loan should be around 20% to 30% of the building cost.
Our advice? Do not try to do it all by yourself. So, it will help you to have a team by your side to help you with all the paperwork. Not to mention, all the papers — also known as permits — are not free. A reasonable permitting budget should be between $400 to $1900. Be sure to set aside a budget to pay these people when the job is done: surveyor will cost between $345 to $675, an appraiser will run about $300 to $450, and a real estate lawyer varies between $150 to $350 per hour.
What to emphasize next?
This is where you take over. You have all the tools to choose the perfect plot of land for your dream home. Now, it is time for you to roll up your sleeves and get to work! You might feel overwhelmed with all there is to consider, but once you are lounging on your cozy sofa in your beautiful new home, all the time, money and energy you put into building your home will be well worth the fuss. Is your home rustic? Is it modern? No matter what kind of home you find yourself in, Design with Frank is here to help make your dream a reality!