Rural vacant land is an overlooked investment opportunity, but it’s also a misunderstood and complicated one – and there are plenty of due diligence questions to ask as a first time land buyer.
Before you buy rural land, there are some common tips and problems you’ll want to know first.
This includes the fact that it’s up to you as the buyer to do your due diligence on the property before purchasing.
Keep reading to learn more!
What is Due Diligence?
When you initially research vacant land, you’ll start to read about “due diligence for land purchases.”
This is a key element in the process and one you certainly must know to make sure you understand everything before buying, especially if you are buying owner financed land.
Due diligence is all about taking the proper precautions before buying and knowing what questions to ask.
You want to make sure you’ve done all the research that you can possibly do.
It’s better to find the issues ahead of time (before you buy) than realize you should have looked harder to find out about the land you’re now stuck with (see our video on the 3 Fatal Mistakes in Buying Land)
There is risk involved with buying rural vacant land, and it can be costly.
Doing your due diligence can be the difference between a good and bad investment (especially if you are looking to make money with raw land).
As a vacant land buyer, you are the responsible party in terms of due diligence.
You must conduct your own independent research.
The seller and agents associated with the property can’t possibly know everything that would interest you.
Thus, it’s up to you to learn the following 27 due diligence questions to ask about the rural vacant land you want to buy.
1. Assessor’s Parcel Number (APN)
The APN is the number assigned to a parcel by the county tax assessor and is used to look up the parcel’s tax records (it is also sometimes called the Property Identification Number).
Not every seller will list the property’s APN in their listing page so you MUST ask the seller for this before you do anything else.
Knowing the parcel APN will make it much easier to complete the rest of your due diligence.
Go the extra mile to ensure that the individual listing the property is the individual who actually owns it.
Give the local recorder’s office a call to verify who the owner of the vacant property is.
You may initially find this strange, but in the event of a separation, estrangement, bankruptcy, etc., individuals will often sell properties that do not belong to them legally.
It’s important to purchase the property from the owner themselves because they could later come back and claim that the property still belongs to them.
You may also want to check whether the seller has mineral rights to the property.
Check out our video below on more information on mineral rights.
3. GPS Coordinates
Since most rural land parcels do not have an address, GPS coordinates can be a crucial way to identify the land you’re interested in purchasing.
Ask the seller for the GPS coordinates if they are not in the listing.
If the seller does not have them, you can use the parcel APN number to pull up a property report from a real estate research company, like AgentPro247, and get the GPS coordinates from there.
You can also use the APN to get the coordinates from the county’s GIS service.
Once you have the GPS coordinates, you can use them to measure the property size in Google Maps.
This is one of the most important questions to ask.
Wetlands are commonly problematic for owners because there are federal and state regulations that prohibit the development of land in a way that affects wetlands.
The best way to identify wetlands is to enlist the help of a wetlands consultant.
This can sometimes be difficult if you’re looking to close relatively quickly.
You can also try doing your own research with the Wetlands Mapper and Google Earth.
5. Flood Zones
Flood zones can be challenging for several reasons.
Properties near bodies of water are particularly prone to flooding.
This can be expensive to insure and can also make your investment vulnerable.
Understanding whether the rural vacant land you’re considering purchasing resides in a flood zone may help you reconsider your purchase.
You will want to look out for FEMA Special Flood Hazard Areas, or areas where there is a 1% chance of flooding each year.
If your parcel is in a Special Flood Hazard Area, you will need to buy flood insurance if you are going to build on the lot.
To check your parcel’s flood zone, go to FEMA’s flood maps.
Also, look into FEMA’s design guidelines and research how you can reduce your flood insurance premium by building smart in a floodplain.
You can also find more information in our video below.
6. Terrain Issues
Depending on where you’re looking for rural vacant land, unpredictable elevations, cliffs, mountains, valleys, ravines, and more can occur.
While initially, you may not flag this as an issue, the topography can affect your ability to build on the property.
If you’re seeking to start a business on this property, plant crops or build a residence, then you want to make sure that the land allows for that.
Visiting the land itself may reveal some of these features, but depending on how large the land is, it may not be possible to see all of its features.
Fortunately, an easy and free way to see the land’s topography is using Google Earth.
You can also hire a local photographer or real estate agent to visit the site for you.
As part of your due diligence, you will also want to check that the property you are purchasing is actually the size that is listed.
You can verify this by checking county assessor records and/or the county GIS system.
As discussed above, you can also get a rough measurement of the land area in Google Maps.
Another important thing to check is whether the lot is going to be large enough for you.
If you are looking to use the property for a specific purpose, such as building a private lake, size will also be very important.
Generally, we do not purchase properties that are less than an acre (although we make exceptions if public utilities are available).
This is because many counties have minimum lot size restrictions if the property will need both a well and septic system.
These restrictions are usually not stipulated in the zoning code but are rather enforced by the agency that handles septic permits (typically the health department).
We made a video (see below) that may help you determine whether an acre of land is enough for you.
You want whatever vacant land you purchase to be useful.
If you purchase land that is 10 feet wide and 200 feet long, then you will likely have problems building a house and making a livable space (even if you can meet setback requirements).
Shop around and use your common sense before making a purchase.
9. Legal Access
Thousands of properties in this country do not have legal access, and whether the property does have legal access is one of the important questions to ask.
If the rural vacant land you’re looking at is surrounded by other private property, then your property is essentially useless.
Why? Because no one can legally access your property without going onto these other properties.
The only way to overcome this is to establish a legal, recorded easement to the property.
Typically, neighbors must be persuaded (in the form of compensation) to help.
It isn’t an unfixable problem, but it is one to be aware of prior to purchase because it requires some additional work to resolve.
We’ve run into many rural properties that don’t have legal access, and you can see one example in our video below.
10. Physical Access
Physical access is an easier item to check for than legal access.
We generally just look at Google Maps to see if there is a road leading to the lot.
It is important to note that just because a physical road appears to exist does not mean that (1) it is accessible at all times of the year, or (2) the road constitutes legal access.
11. Back Taxes
Understanding your tax obligations before purchasing a property is crucial.
Some properties have high taxes compared to their property values, which is something you’ll want to keep in mind before purchasing.
You’ll also want to make sure that the property taxes are paid up to the date of the transfer.
You can request the original receipts from your seller for these payments for verification.
Most county assessor’s offices have online tax records that allow you to look up the current amount due on the property.
You can also call the county treasurer or tax collector to verify that the taxes have been paid.
This way, you don’t get stuck with anyone else’s property taxes!
If it turns out that there are a lot of back taxes owed, you will want to confirm that the property has not already been sent to a tax lien/deed sale.
Keep in mind that many counties will reassess a property when it is sold.
During a reassessment, the taxes can go up or down.
One of the important questions to ask the county assessor is whether they will reassess the property once it is sold.
Also, ask for the general method the assessor uses to calculate the tax rate. This will help you calculate your future tax burden.
The zoning classification for a property is an important element as it dictates what you’re able to do with the property after you own it.
The property may be zoned for residential, mixed, commercial, industrial or agricultural uses.
If you purchase a piece of land intending to use it as farmland, but later realize that you can only build a house on it as it’s zoned as “residential,” then you’ll have wasted both your time and money.
Furthermore, not all property is created equally.
Some rural vacant land has better allowable uses than others.
It’s best to evaluate these while you’re still looking for land.
Be sure that the land will fit your needs from the get-go with zoning classifications.
Also, be on the look-out for unique zoning issues, such as the below:
If your primary goal in purchasing the rural vacant land is to build, then you’ll want to call the local zoning department to dig a little deeper into zoning regulations.
One of the important due diligence questions to ask the zoning department is whether there are any setbacks and road frontage requirements dictated by the zoning ordinance.
Setbacks are common and usually impose a minimum distance that must be maintained from your building to each lot line.
Although not often an issue, you may have a hard time meeting these setback requirements depending on the size and shape of the property.
Just be aware of the setback requirements and do a gut check to see if you think there is enough space on the lot to meet them.
15. Road Frontage Requirements
While you are speaking with the local zoning department, you will also want to get information on road frontage requirements.
Some counties require that all parcels have a certain linear footage of public road access in order to build on the lot.
This is to ensure that properties are accessible and have sufficient space to install a driveway and/or connect utilities to any planned building.
It usually isn’t hard to meet road frontage requirements, but, if the lot is oddly shaped, this can sometimes be a problem.
16. Public Utilities
The availability of public utilities is something that buyers sometimes take for granted.
However, this isn’t always the case for rural vacant land.
Be sure to investigate whether water, sewer, electricity, waste management, internet, gas, and phone services are available.
If not, understand what the alternatives are and how much they will cost.
Important questions to ask yourself is whether you would want to build a house where you can’t flush a toilet or if you want to live in an area without Wi-Fi or phone service? Probably not.
Check ahead of time so that your house or business is useable.
17. Perc Test
Checking if a perc test was ever completed is a must if your rural vacant land does not have access to a sewer system.
The perc test evaluates the soil percolation rate, or the rate at which water drains through the soil.
A perc test is typically an indicator of whether a septic system (an alternative to a sewer) can be installed on the property.
Each county has its own rules and regulations around perc tests so it’s a good idea to speak with the relevant county agency (usually the health department) to understand what is required to get a septic permit.
It’s important to know that if a perc test does not meet the county requirements, you will generally not be able to pull a septic permit.
One of the important questions to ask your seller is if a perc test was ever done on the lot and get a copy of it
If the seller has no record of a perc test, then you must decide whether you want one done before purchasing.
This will depend on the price of the property and what you want to use it for.
For a higher-value lot, it may be worth the investment in a perc test prior to purchase.
While you are looking into septic systems, you should also check with a contractor on the cost to make sure it is in your price range.
Having access to water on your property is essential if you want to build.
A lot of properties (especially rural properties) do not have access to a municipal water supply.
This doesn’t mean you shouldn’t purchase a property, but you should look into alternatives to see if they are feasible and within your price range.
For example, are you able to drill a well? Although there are alternatives to a well, the last thing you want is to have problems accessing water.
To check whether a well is feasible, you should call the county and state to determine what is required to pull a well permit.
Keep in mind that in certain western states you may need to purchase water rights in order to drill a new well.
Water rights are usually administered at the state level, so check with the state on how water rights work in your area.
You may also want to check with a local contractor on the cost of installing a well.
If you are in a desert area, or other location where you may have to drill to a significant depth to find water, wells can be fairly expensive.
If you feel uneasy about water availability early on in the process or feel that it may be a problem, it may be best to pass on rural land altogether.
To check whether electricity is available in the area, you can call the local power company (the county will usually be able to tell you who that is).
You may also want to ask the power company for a cost estimate on extending power out to the lot.
If electricity isn’t available, you will want to consider alternative systems, such as solar or a generator, if you want to build on the lot.
One of the important questions to ask the building department is if there are any permit requirements for solar or other alternative systems.
20. Homeowner’s Association (HOA)
Knowledge of an HOA or POA (property owner’s association) is necessary because it can later limit what you can use the land for.
Furthermore, most HOAs charge fees, so you’ll want to know ahead of time if this is something you’ll be responsible for paying.
It’s worth doing additional research on the HOA even if the seller doesn’t list it.
Sometimes, like taxes, the buyer may have neglected to pay their HOA fees.
Much like property taxes, you don’t want to purchase a property with a lien on it for HOA fees.
Be especially careful when buying properties on marketplaces, like eBay.
We once looked into an eBay listing that specifically stated there were no HOA fees.
Yet, when we spoke to the county assessor, she told us that the property was in fact in an association.
It turns out the property had a lien on it for unpaid HOA fees!
21. Existing Junk
You may initially be excited about your purchase of vacant land only to discover it’s filled with random bits of junk.
If there are tires, rubble, oil or other contaminants on the property, step away immediately.
These types of messes are expensive to clean up and will ultimately cut into your own pocket.
22. Previous Uses
You absolutely don’t want your vacant land to have been used as a landfill, but what other types of previous uses could affect you?
There are state laws that exist regarding commercially zoned property, so if you’re looking at this investment, then you’ll want to make sure you’re not inheriting any environmental contamination.
Why? Because contamination could fall on your shoulders as the new owner.
If you are purchasing an infill lot in a heavily developed/commercial area, you will want to check for groundwater or soil contamination (underground oil tanks, lead, chemical contaminants, etc).
Order a “Phase I Environmental Report” so you can get a feel for what’s happened before you.
The Phase 1 report will help assess whether further testing needs to be done based on prior use.
For example, if there had previously been a dry cleaner or gas station nearby, it’s a good bet that Phase 2 environmental testing will be recommended.
If you’ve ever purchased a house in a suburban or urban setting, you know that your property value is severely impacted by the neighborhood you’re in.
Well, the same holds true for rural vacant land.
Your property’s value is affected by the value of land around you.
Who you live next to and how they take care of their property matters.
You’ll be much better off if you’re in a desirable area and if someone else is eagerly trying to purchase land near you.
Think about it this way…would you rather live near a national park, a winery or a landfill? One of those things is not like the others.
The value of farmland or ranchland is also impacted by the natural surroundings and characteristics.
What is the soil like? How much water is in the area? How productive are nearby farms?
If farm or ranchland is what you are looking at, you can read more on our post on Farms vs. Ranches vs. Homesteads.
24. Recorded Deeds
Look at public records for all the documents associated with your rural vacant land.
This may include historical deeds, mortgages, covenants, restrictions, liens, and easements.
To do this, you can go to the public records database and then search where your parcel is located. This website will bring up the county clerk’s/recorder’s public database (if there is one).
You can then search the county clerk’s/recorder’s online database for all relevant documents.
When doing due diligence, it’s recommended that you check all the recorded deeds and then also purchase title insurance to ensure a clear title.
Before you agree on a price for rural vacant land, check what other parcels in the area are going for.
This can help you avoid overpaying.
If you’ll be building on the property, you’ll want to make sure you look for other homes in the local market to ensure that the housing market is solid.
In worst-case scenarios, vacant land investors have found that the home they built is worth less than it cost to build.
Due diligence requires a call to a few local contractors, who may be able to give you a rough price per square foot.
Make sure that the cost to build the house isn’t higher than the market comps in the area.
For more on how to buy vacant land and build a house on it, see our video below.
You may not think it’s worth the cost of ordering a survey, but this will come back to haunt you, especially if you are purchasing a high-value property.
A survey will show you all possible encroachments and will verify the boundaries described in the listing.
Be sure to order an ALTA survey.
ALTA surveys are completed according to the requirements set by both the American Land Title Association (ALTA) and the American Congress on Surveying and Mapping (ACSM) and generally provide more information than a basic boundary line survey.
ALTA surveys can even help with most of the above listed due diligence items as they often show flood zone boundaries, wetland locations, zoning information and utility locations (although sometimes for an extra cost).
27. School District Rating
You may also want to look up the school district rating on Niche.com since it gives a good indication of how good the area is for kids.
The school district can be very important for buyers with families!
Finding the right questions to ask is important in ensuring that you make an excellent investment when buying rural vacant land.
Whether you’re new to the process or you find a parcel that seems too good to be true, it’s always worth looking further.
Sometimes, the downsides of an investment don’t always meet the eye.
You may not be able to see all of the topography or whether you’ll have public access to the property.
It’s easy to get wrapped up in the dream of property ownership, but if you invest in a piece of land that has no practical use, then you’re hurting yourself financially.
Did we miss anything? Let us know in the comments.
If you are interested in land investing, you can check out our article on How to Get Started in Land Investing.
And if you are looking to sell land, visit our page on how to Sell Your Land.
If you are looking for Free Land, check out our free land giveaway.