3 Things to Consider When Buying a Rural Property
Over the past decade, the real estate industry has witnessed a growing demand for rural properties. In rural towns, real estate is available at significantly lower prices than in cities. A 2021 NPR article reveals that the pandemic led to an increase in housing prices. As a result, a surge of people are moving to rural areas due to the rise in housing prices across the U.S.
Besides, many people, particularly businessmen, buy land for farming in rural areas. An estimated 30% of farmlands are owned by landlords who don’t farm themselves but rent out to farmers. Why? Because they are a high-return investment with low risk.
Therefore, buying a rural property is worthwhile. However, finding the right one that suits your needs isn’t easy. To save you from investing in the wrong property, we’ve discussed a few things you must keep in mind when researching your options.
As with any urban property, location is the most critical factor when it comes to buying land in rural areas. It is said so because the location of the land has a direct impact on its value, capital appreciation potential, and rental yield.
When it comes to urban areas, buyers usually look for properties close to schools, workplaces, nightlife attractions, and shopping malls. Buyers also prioritize safe and secure neighborhoods.
Many of the same factors apply to rural real estate, but they also include the quality of roads. Paved roads will allow you to access your property with ease, whereas graveled roads won’t.
Also, consider the area’s climate, as that will let you know the prevalence of natural disasters. Remember to research whether food resources are available nearby or you will have to travel miles to buy them.
Asking locals of the area will be great, but do your research to be on the safe side.
#2 Zoning and Land Use Regulations
Contrary to what investors believe, rural land comes with its own set of restrictions. That is why Land Broker MLS advises investors to thoroughly understand zoning and local laws before purchasing land. Besides, you must also learn about the land use regulations associated with the property. Doing so will let you know what structures you can build and how you can use the land.
While zoning and land use laws are lumped together, they are different. Local laws or regulations that control how a property can and cannot be used are known as zoning. Zoning laws, for instance, can limit the maximum height of structures in a given area, irrespective of the type of building allowed.
On the other hand, land use regulations govern the usage of land and building structures. That means land intended for residential purposes cannot be used for commercial operations and vice versa.
For this reason, we advise you to research zoning and land use regulations to ensure you can use the land for the intended purpose. When seeking information on buying land, getting in touch with a reputable real estate firm will be the best bet. That’s because its licensed agents and brokers will provide you with up-to-date details on zoning and land use regulations.
If local laws of the rural location don’t align with your usage, brokers can help you find another property well-suited to your plans– be it commercial, residential, or agricultural.
#3 Review Utilities
Urban properties have access to all utilities, but that isn’t the case when buying a property in a rural area. Therefore, it’s best to check all available utilities beforehand so that you won’t have to deal with surprises later.
Not all rural properties are hooked to a septic system. If the property you’re buying is connected to a public sewer system, you will have to pay taxes to the municipality. You can lower your tax by installing one on your property.
However, if the property already has a septic system, make sure you get it inspected prior to signing the agreement. Should it break down, you will have to replace it, which would be a costly endeavor. You can save yourself from the trouble by getting it inspected beforehand.
Unlike urban areas, power lines in rural areas are unreliable. Check if a backup power such as UPS (uninterruptible power supplies) or generator is available. If not, you will have to get one.
Also, rural properties don’t receive water through a public water source. Instead, well water systems supply water in rural areas. While it cuts down on utility bills, you will have to pay for routine maintenance.
Assessing all the existing utilities will help you understand the upgrades you need to make in the property.
Be it for commercial operations or farming purposes, buying rural property is a great way to diversify your portfolio. However, the investment will only prove lucrative if you conduct thorough research of the area, learn about zoning and land use regulations, and review utilities. Otherwise, it will turn into an expensive mistake.
If you’re purchasing rural property for the first time, seeking help from a licensed broker or agent is advisable. As they are well-informed about rural real estate, they will help you navigate the complexities with ease. Rest assured that you will make an informed decision.
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