You would think that buying vcant land would be the logical best first step toward barndo ownership. But you might be surprised.

When buying vacant land, should you buy first and then plan your dream barn home? A recent survey shows that a full 37 percent of barndominium owners wish they had done more checking before buying. Obscure county regulations and unknown deed restrictions can quickly render your dream design unrealistic if you didn’t do your homework before buying your land.

What do I need to know before buying land?

“As an experienced land investor, I’ve learned (sometimes the hard way) that there are a number of things that need to be evaluated before purchasing a parcel of vacant land.” says Seth Williams, writing in a post on retipster.com

There are several things to look for and then act on proactively, he says.

What is the zoning on the property?

“First and foremost, it is vitally important to understand what a property can be used for, and what the highest and best use of the property is. With a simple phone call to your local planning & zoning department, most offices can give you the answer to this question in a matter of seconds.

“Once you know the zoning classification (e.g. – residential, mixed-use, commercial, industrial, agricultural, etc.), ask them to give you some examples of what type of property would be allowed under each of these particular zoning classifications.

“They may even give you some ideas that you hadn’t previously thought of. Once you understand the most ideal use of the property – you can quickly determine whether it will fit your needs (in your case, a prospective site for a barndominium.)”

What is the topography of the property?

This information is vital, and will determine to a great degree the design features of your future barndominium.

In many cases, the topography of the land can be vital in determining, for example, whether you’re going to want a traditional, 40×60 barndo with continuous roof and a large shop area (which requires a fairly flat surface).

Or, would it be more appropriate to invest in the solid and adaptable rugged beauty of a post and beam structure?

There are some surprisingly effective tools at your disposal to help make this determination, Williams says.

And one of the most useful is the now-ubiquitous but still powerful Google Earth. He explains still further in this video:

Here are some other possible pitfalls of buying vacant land.

What is the annual tax obligation?

In most counties around the country, this won’t be a deal breaker. But remember – you won’t be taxed just on the size of your property.

The taxing authority will also determine as best it can how to wring tax revenue from your “property improvements.”

That would be your barndo.

Many current owners have simply refused to let the tax man (or woman) in the door of their otherwise utilitarian pole barn-looking (or warehouse-resembling) structure.

But others report that this will only work until he (or she) shows up with the sheriff’s deputy in tow. Then, being a holdout may go down hard with an already irritated tax person.

What public utilities are available (if any)?

Here, you must

  • determine whether you’ll need to drill a water well,
  • decide if you can hook into a local or rural sewer system or if you must install a septic field of your own,
  • decide if you’ll be buying electricity from your local co-op or going completely off-grid (a more and more popular option.)
  • debate (inter nally)bring in a large propane tank to provide hot water and possibly your heat during the winter
  • and finally, see whether it even makes sense to install a land line in this age of cellular availability and convenience,

Know the costs involved

Wesley Penlon, writing on howstuffworks.com, tells us that “real estate is an investment of time and money.”

In other words, “ye will,” as they said famously in The Bible, “reap what ye shall sow.”

Put in very little time prospecting for and verifying all the critical aspects of land purchasing, and you likely will wind up with something that you (a) have to just settle for and live with or (b) have to sell (probably at a loss) to someone even less knowledgeable about the whole process than you were.

Don’t be that guy.

Get all the costs lined out on paper well ahead of any deadlines — real or imagined — designed to force a purchase. And then there will be no unpleasant surprises down the road as you finally break ground on your new metal building.

Do work with a pro who knows land.

Devon Thorsby, real estate writer for U.S. News, recently published a Dos and Don’ts list for folks who are intent on buying land.

Among them is an admonition to always work with a real estate agent who has extensive experience negotiating land deals.

They will typically know which acreage is unrestricted enough to build a barndominium on. And, they may know a local landowner willing to sell off a few acres to a prospective new good neighbor.

Don’t expect to necessarily get a loan.

A land purchase can’t be leveraged with a bank the same way a home purchase can, Ms Thorsby says, so you’ll likely have to pay cash if there’s no structure on the property yet.

An investor purchasing an apartment building, for example, “might be able to put down 20 percent and get 80 percent from a bank, putting up the land and the building for a mortgage,” says Larry Link, principal broker and president of Level Group in New York City. “But if you have a piece of land, you might be lucky if [a lender] gives you 40 percent or 50 percent of the value – and that’s typically if you have a good bank relationship or other collateral. You’re more likely to get zero.”

But the good news for a barndo builder is that you’ll have a much better chance of being approved for a construction loan if the banker knows you’re going to be living in the building you want to put on the land.

The barndominium you’ll build, in other words, will often serve as collateral on the loan — if you’re able to deal with a local banker who knows you.

(See also our earlier post on Financing a Barndominium).

Don’t skip the survey or environmental tests.

This is another point raised by Ms. Thorsby in her report. Here’s why.

“Similar to a home inspection and background research on a house, a plot of land needs to be subjected to tests and checks to ensure you know what you’re buying and that you’ll be able to build on it.

“Environmental tests check the soil for contamination from previous use. The site of a former gas station or auto body shop is more likely to have contaminated soil, for example, and residential homes can’t be built there. The land’s potential for flooding or poor soil conditions for building are also of concern.

You’ll also want to have a surveyor take a look at your property to identify the boundaries. Especially if the land is in a neighborhood and has been vacant for years, Neighbors may have encroached beyond the property lines, intentionally or not..

You may be shocked, she adds, that part of the garden and part of the birdbath that these people [next door] have been attending to for the last eight years is on your property.

Check on the possibility of flooding

Finally, flooding is not something you’ll want to have happen on your new land.

It’s a powerfully destructive force that can outright destroy buildings. And cause thousands of dollars of water damage., Ms Thirsby concludes. Sound appealing? Nope. Not one bit.

“So how can you know if a vacant lot falls within a floodplain? First, check the plats. Past research on the land may well have done your work for you already by mapping out the property’s elevation and determining potential flood areas.

“If you strike out, turn to a surveyor for help. Flood zones are clearly defined with letter designations. Zone A means a 1 percent chance of annual flooding — flood insurance is required for building here. Zones X or C are the ideal ratings — that means a less than .2 percent chance of annual flooding.”

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