Most of our close friends know that we decided to build a new home. As with many other exciting adventures in our lives, we have no double that there will be obstacles along the way. But the thought of a home of our dream, our design, our input, our effort just makes every ‘imaginary’ challenge so insignificant. Imaginary, right? Little did I think about unexpected challenges; yes, the ones that I didn’t imagine. Surely, by reading this far, you get a gist of a journey full of frustration, laughter, fights, momentary relief, and tears (yet to come). As exciting as the thought of building a house may be, I also want to share my ‘dream’ journey with you. Hopefully, with my help, you will make better choices and decisions.
Today, I want to talk about buying a section or a piece of land, and what you should watch out for.
Many moons ago, at a time when we were still exploring ‘infinite’ possibilities (so it seemed) of real estate, we stumbled across a piece of land. Little did we know about buying a section and, looking back, I have no idea where the confidence came from but, at the time, buying a piece of land seemed to be the way to go. I remember the drive up North and we stopped at a ‘grassy’ huge piece of land, not yet subdivided. Our land is going to be somewhere here or there!
We did some research on the region itself, what future development plans are in place, and decided on a piece that looked proper. A summary of the contract conditions: 5% deposit (that’s ok), settlement in 3 years (even better!). But our excitement exceeded any reasonable doubt of perhaps an early settlement! Nor did we explore further when we found out that there was no record of resource restrictions!
By now, some of you experienced investors, builders, designers, and investors may have raised a red flag, for the right reasons. Not only was the settlement pulled forward by a year, against our financial plan, but it also has a height restriction, after consulting a designer recently. Sigh!
So here is what you should consider when you buy a piece of land to build on:
1) Have a plan in place – What is your intention with the piece of land? If you are like us who see potentials in a section but uncertain about how the future may look like, lay out your options of what you might do with the land, and take it from there. If it’s going to be an investment, you need to prioritize your financial return – How long are you holding it for? Are you tenanting? When are you selling? In many cases, many answers are uncertain but by considering these questions, you are starting to build a thorough plan.
2) Do your research ‘thoroughly’
– This is easy for investors, builders, and developers, but emotional for homeowners. Look beyond what you see! Check out restrictions, district rules, and consents! Dig deeper! You could also check out Building Your Own Home
on the New Zealand Government website.
3) A buffer in your financial plan – We didn’t have financial flexibility! When the settlement was pulled forward, we panicked. Plans had to be changed and financial alterations to be made. Be careful in what you sign up for and consult your agent for professional advice. If you have a financial consultant, even better!
4) Seek for professional advices – Find out how much the design cost will be, how much the building consent is likely to be, whether there is anything else that you may have missed out! Your real estate agent should have a handful of recommendable tradies for you.
5) A strong heart – Keep in mind that plans are important but unforeseeable changes may happen! In our case, so far it has been the height restriction. But hey, if you did 1)-4), you would have minimized risks and built a strong heart for any surprises that may come!
This journey is new to us, too. And as prepared as we thought we were, we are not prepared. But hey, we’re building and are looking forward to it despite of current and future obstacles.
Hopefully, this post helps to build confidence in those of you out there who are uncertain about buying a piece of land for your future home. Share this with your family and friends so that we can all build better and smarter. I will update our building progress along the way to share more tips and tricks with you all.