Buying a Residential Land Lot

Building a new house
Building a new house

When a home buyer is looking for a home, there are many choices to make. Future home-owner has to decide if a home going to older home or new construction.

When going the new construction route, the home-buyer can choose the location, the subdivision, the floor plan, also the finishes inside the house.

Buying a New Conctruction in a New Subdivision:

But some people do not want to live in a subdivision. There can be many reasons. One of reasons is that subdivisions usually have a Homeowners Association (HOA) , and some people don’t want to be a part of HOA. Some people don’t want to live in the neighborhood when all the houses look a like.

Buying a Residential Land Lot and Building a House:

So, when a home-owner wants to build a new house, but does not want it to be in a subdivision, there is another way to get a new construction home. Some home-buyers buy a residential land lot and build one of a kind home.

When looking for a land lot to build a home, location is the most important factor.

Residential land for sale in Broward, FL in May 2018
Residential land for sale in Broward, FL

I looked up some information on our local MLS – Realtors® of the Palm Beaches and Greater Fort Lauderdale. And from information I gathered I was able to make this table above.

There are 331 residential land lots for sale right now in Broward County, Florida. The min listing price is $19,200, and max is $10,749,000. Out of all  residential land lots for sale, the median listing price is $520,000.

Out of these 331 residential land lots available in Broward County, about one third are waterfront. Waterfront can mean anything with water – canal, creek, intracoastal, lake, etc. So, there are 127 residential land lots have some kind of water view. Min listing price is $50,000 which is much higher when comparing with a lot without water view. Max price is $10,749,000. Median listing price $1,125,000 for a waterview lot, which is also much much higher than non-waterfront land lot.

If you would like more information real estate trends in Broward County, please look up my other blog posts at Market Update or Local Market Conditions and Home Prices .

The information that I got to make this table above is from my local MLS – Realtors® of the Palm Beaches and Greater Fort Lauderdale. The information is deemed to be reliable but not guaranteed.

 

 

What Is an Investment Property?

IMG_9624
Small older house in Hollywoood Lakes neighborhoood in Hollywood, FL

An investment property is purchased with the purpose of gaining a return on investment. It can be any type of real estate, be it a vacant land, an apartment building, a duplex, a single-family home, commercial property. Usually, the property is NOT occupied by the property owner. But sometimes investor buys a few units appartemnt building, live in one apartment and rent the rest. It could be a duplex, when the owner lives in one unit and rents the other unit to a renter.

How Is Profit Generated?

Profits are generated through rental income and/or capital gains.

Property investing involves buying, owning, renting, managing,  and/or selling of real estate for profit.

This type of property is purchased with the goal of  an income by renting the property, buying low and selling high, profiting over time from appreciation, renovating and fixing the property selling it for more than the purchase price.

Improvement of real estate as part of an investment game plan is generally considered to be a sub-specialty of real estate investing called real estate development.

 

Liquidity and Cash Flow

Real estate is an asset with limited liquidity when comparing to other investments.  It is not like cash in the savings acount, not like stocks or shares, when the owner can get cash withdrawal from the saving, or sell the stock and get the money fast. Real estate owner can’t get cash fast, unless sells real estate at discount.

Real estate depends on cash flow. It needs a lot of capital up front , but this capital can be gained with a mortgage. the owner borrows money.

This where the saying is “Make money with others’ people money

 

Location, Location, Location

Waterfront single family house
Waterfront single family house in Davie, FL

“Location. Location. Location” is a a popular statement that reinforses the location of a property in determining value of real estate.

Often it is said as, “The three most important considerations in real estate are location, location, location.”

 

As the home-owner you can make so many changes at the house:

You can change the landscaping around the house.

You can paint the walls different color.

You can remodel the bathroom inside the house and get a brand new shower instead of an old bathtub ( or get a tub instead of shower)

You can repaint the kitchen cabinets different color. You can get new kitchen appliances. Or you can just tear down old cabinets and get brand new ones.

Only one thing you can not change about the house- it is the location.

 

I believe location is the only thing the home-buyer has to decide very carefully on.

Once the homeowner lives in the house, it is possible to make many changes to the house itself. It is imposible to change location.

If you really do not like the neighborhood where the house is located, but love the house itself, be very careful making the decision wheather to buy or not to buy the house.

What is Earnest Money When Buying a Home?

Money
Coins

The earnest money deposit is a very important part when buying a home.

When a buyer gives an earnest money to the homeowner, it  tells the property owner  that a buyer is very committed.

Seller does not want to accept an offer without earnest money deposit.

If seller accepts an offer for the home, then earnest money will go toward the down payment and closing costs.

When a homeowner accepts the offer from the buyer, bioth sides sign a contract on final price and down-payment. The contract does not force the buyer to buy the home because home inspection can reveal problems with the house.

The contract does guarantee that the homeowner takes the house off the market while the house is inspected and appraised.  The buyer is required to give an earnest money payment as a proof that offer is serious.

Earnest money is paid 1-3 days after the homeowner accepts the buyer’s offer.

Earnest money is usually paid by a check or a wire transfer into a trust or escrow account which is held by a legal company, real estate brokerage, or title company.