Land Purchase:
Financial Impact


Will your land purchase have a positive or negative
financial impact on your building budget?


Consider the questions that follow to help you determine
where you want to divest your dollars.



  • Would the land purchase be a good deal? Is it affordable?
    Consider the approximate size and cost of the proposed home, and the cost of both together - is it feasible on your current salary?



    If you cut the costs associated with the building of your home (owner-build, subcontract, provide some of own labor/materials), it may well appraise for more than you paid for it.

    If so, your house will acquire instant equity!

    On the downside, be prepared to pay higher taxes and insurance because those decisions are likely made based on the appraised value instead of the out-of-pocket costs.




  • Must a well be dug or is local water available?
    If you have to connect to the local water supply, what are the tap fees going to run?

  • Is local sewer service available or must you provide a septic system?
    At what estimated cost?

  • What can you expect as far as taxes on your house? Insurance?
    Be sure you find out in advance what your approximate costs would be for the size of house you hope to build, and the location in which you are considering the build.

    Insurance costs may be lower depending on numerous factors, including your distance from a fire hydrant and fire station, proximity of the police station, and the type of structure you plan to build.


    A local builder informed me that an ICF home he built in the area would enjoy low insurance premiums. Apparently because of the strength of the structure against storms and fires, the homeowner would benefit monetarily - not only would they save on heating and cooling bills, but also on insurance.



  • Must there be extensive site-clearing before the start of construction?
    If you plan to build a basement , is there bedrock or subsurface stone that must be blasted away first?

    How about tree removal?


These and other questions, if addressed pre-construction, could end up sparing you many dollars and unexpected "surprises."




Go from Land Purchase Financial Impact to Lot/Land Selection


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