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Old 01-24-2012, 09:58 PM   #1
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Considering buying land...what do I need to know

Alright, so I am currently 21, work full time and go to school full time. Will have my bachelor's degree in CJ by the end of next year. Have a good paying job currently, and hope to obtain an even better one once I have graduated.

Anyways, my expenses are very minimal right now as all I have is car payment and insurance.

My ultimate goal in life is to be able to own property for recreational use whether it be for riding atvs, hunting, fishing, hiking etc... I am a hunting fanatic and would love to be able to own my parcel of land.

Having said that...

At the age of 21, do you think I am too young to even think about buying land?

What kind of process would I even need to go through?

Are you able to take out 30 year (mortgages)? if that is what its called

Money down required?

Possible risks involved.

Pretty much would like to hear what ya'll think about it. Would really like to hear from those who have purchased land or made similar investments.
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Old 01-24-2012, 10:21 PM   #2
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Purchasing land is generally always a good idea. I don't think I would buy something that wasn't going to have a house though. If your making payments on it anyway, might as well live there too. No need for two mortgages. It is a good time to buy, but not always easy. Banks being tight right now, and a large amount of places on the market are short sales. Those take months to years to get.
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Old 01-24-2012, 10:23 PM   #3
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As far as putting money down, you'll have to talk to your bank and see what kind of deal you can get pre approved for. That's really your first step.
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Old 01-24-2012, 10:24 PM   #4
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I think dont think your too young to buy property. I've looked into it and im 21(just decided to finish school first) As for the process your going to go through any process of buying real estate, the normal bs. I'm pretty sure the mortgage is up to what you choose. I think what 15 or 30 years? Money down is just going to help you in the long run, but not always required. Your possible risks are just like owning any house. Not being able to pay mortgage. Although quite a few beers have been drank before replying. Heres what I think, although buying a piece of property would be dope, especially at such a young age. Is this really the right purchase to do? Are you currently renting? Living with your parents? Own your own house? If you don't own your own house this is where I would say screw the property and look into buying a house. Or if you are looking at at buying property think about the option of building/putting a house on the property. If i read this right your looking for property for outdoor activities correct? If so I don't think this would be my first property purchase...alot of rambling going on..sorry I'll go back to drinking this cheap beer.
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Old 01-24-2012, 10:48 PM   #5
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MAKE SURE THERE IS GOLD AND OIL UNDER THE DIRT
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Old 01-24-2012, 10:51 PM   #6
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x2.....
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Old 01-24-2012, 10:51 PM   #7
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(My personal experience ... I am not a professional).

First off, do solid research before choosing your real estate agent or mortgage broker. Ask your family, your friends, your business contacts .. anybody you trust .. who they used. Word of mouth referrals really are worth their weight in gold. I cannot emphasize that enough. Too many people just in it for the cash. They're not the people for you. Choose wise council.

On land only: My experience is buying raw land (no house) has always required a high down payment. Usually 25% down because a lot of banks don't like financing land alone. It's a high risk for them & they want you to have sizeable skin in the game.

Now a house is a different matter. If you're a 1st time homebuyer, there are many good loan programs available that will allow you to make a small down payment .. 3-5% for example. So on $200,000 that would be $6,000-$10,000 down.

I don't recommend doing zero down, especially since even a small down payment can help you get a better interest rate. And that interest adds up fast.

I'm also a HUGE believer in fixed rate loans. If you can't afford a fixed rate loan, then you probably shouldn't be buying at all. Adjustable rate and "interest only" loans sound attractive because they can offer a much lower payment at the outset. But the potential for huge increases in payments in later years is a high risk right now. Interest rates are at all time lows. So there's really nowhere for them to go but up. So on an adjustable rate mortgage, you can pretty much be assured your payments will go up. And if inflation takes hold, they could skyrocket. So try to go fixed rate.

That all being said, in a lot of the nation, prices are still trending downward. If you plan to buy & hold for 5-10 years, you'll be fine. If you're looking for a short term gain, be prepared for disappointment. You are young. So I assume you still don't know where exactly you'll end up even in a couple years. So my question might be ... why now?

Just my 2 cents.
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Old 01-25-2012, 09:28 AM   #8
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Quote:
Originally Posted by MxRacer190 View Post
MAKE SURE THERE IS GOLD AND OIL UNDER THE DIRT
Owning the land won't necessarily mean you own the gold or oil under it. You'd have to own the mineral rights as well. It probably differs from state to state.
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Old 01-25-2012, 09:37 AM   #9
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Quote:
Originally Posted by Evil Monkey View Post
Owning the land won't necessarily mean you own the gold or oil under it. You'd have to own the mineral rights as well. It probably differs from state to state.
I don't mean to thread jack, but I'm curious by that statement. So say it was determined there was gold underneath where my house sat. I wouldn't let them on my property to start digging holes so am I correct in stating they could mine and go under my property without my permission??
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Old 01-25-2012, 09:39 AM   #10
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with buying land there are some special considerations, mostly having to do with access and right of ways.

buy something that has road access to it. If you end up buying a piece of land sourounded entirely by other private property you need to get an easement allowing you legal access to your land through a neighbors, nothing but potential problems.

If you can find something that has direct road access, you also want to make sure that it has power available at the road, even if you dont plan to build on it for twenty years, the cost of bringing it in on your own can be astronomical.

resale is going to matter, generally, the cost of land never goes down. look out for large parcels of land that seem to be way to cheap. they are usually either 90% swamp, or they are about to have a power line, gas line, or some other government right of way coming through them, and the owner is trying to offload it before it happens.

I looked into the same thing a few years ago, ended up buying a house instead, but always wish i had the land. good luck.
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Old 01-25-2012, 09:44 AM   #11
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Quote:
Originally Posted by MountainEarth View Post
(My personal experience ... I am not a professional).

First off, do solid research before choosing your real estate agent or mortgage broker. Ask your family, your friends, your business contacts .. anybody you trust .. who they used. Word of mouth referrals really are worth their weight in gold. I cannot emphasize that enough. Too many people just in it for the cash. They're not the people for you. Choose wise council.

On land only: My experience is buying raw land (no house) has always required a high down payment. Usually 25% down because a lot of banks don't like financing land alone. It's a high risk for them & they want you to have sizeable skin in the game.

Now a house is a different matter. If you're a 1st time homebuyer, there are many good loan programs available that will allow you to make a small down payment .. 3-5% for example. So on $200,000 that would be $6,000-$10,000 down.

I don't recommend doing zero down, especially since even a small down payment can help you get a better interest rate. And that interest adds up fast.

I'm also a HUGE believer in fixed rate loans. If you can't afford a fixed rate loan, then you probably shouldn't be buying at all. Adjustable rate and "interest only" loans sound attractive because they can offer a much lower payment at the outset. But the potential for huge increases in payments in later years is a high risk right now. Interest rates are at all time lows. So there's really nowhere for them to go but up. So on an adjustable rate mortgage, you can pretty much be assured your payments will go up. And if inflation takes hold, they could skyrocket. So try to go fixed rate.

That all being said, in a lot of the nation, prices are still trending downward. If you plan to buy & hold for 5-10 years, you'll be fine. If you're looking for a short term gain, be prepared for disappointment. You are young. So I assume you still don't know where exactly you'll end up even in a couple years. So my question might be ... why now?

Just my 2 cents.
Quote:
Originally Posted by brow View Post
with buying land there are some special considerations, mostly having to do with access and right of ways.

buy something that has road access to it. If you end up buying a piece of land sourounded entirely by other private property you need to get an easement allowing you legal access to your land through a neighbors, nothing but potential problems.

If you can find something that has direct road access, you also want to make sure that it has power available at the road, even if you dont plan to build on it for twenty years, the cost of bringing it in on your own can be astronomical.

resale is going to matter, generally, the cost of land never goes down. look out for large parcels of land that seem to be way to cheap. they are usually either 90% swamp, or they are about to have a power line, gas line, or some other government right of way coming through them, and the owner is trying to offload it before it happens.

I looked into the same thing a few years ago, ended up buying a house instead, but always wish i had the land. good luck.
Quoted for thruthfullness and accuracy.
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Old 01-25-2012, 09:44 AM   #12
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Quote:
Originally Posted by Pugga View Post
I don't mean to thread jack, but I'm curious by that statement. So say it was determined there was gold underneath where my house sat. I wouldn't let them on my property to start digging holes so am I correct in stating they could mine and go under my property without my permission??
Yes. In fact, they may have the right to just start digging on your property. It would be spelled out in the deed.

http://www.caddominerals.com/mineral-rights-law.aspx
From the site:

Basic Rights: As a mineral owner, you have the right to use as much of the surface as is necessary to puruse the minerals. You have the right o execute leases and receive royalties, and you may further convey the mineral ownership.


In many states, you probably also own the mineral rights. I believe in California, they're all seperate and the rights were bought and sold long ago.
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Old 01-25-2012, 09:53 AM   #13
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You know the old sayings:

"Location location location"

"Buy land because God ain't making more of it."
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Old 01-25-2012, 09:56 AM   #14
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Quote:
Originally Posted by Evil Monkey View Post
Yes. In fact, they may have the right to just start digging on your property. It would be spelled out in the deed.

http://www.caddominerals.com/mineral-rights-law.aspx
From the site:

Basic Rights: As a mineral owner, you have the right to use as much of the surface as is necessary to puruse the minerals. You have the right o execute leases and receive royalties, and you may further convey the mineral ownership.


In many states, you probably also own the mineral rights. I believe in California, they're all seperate and the rights were bought and sold long ago.
Yikes

Never knew such a thing existed, thanks for the info.
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Old 01-25-2012, 09:59 AM   #15
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Quote:
Originally Posted by brow View Post
with buying land there are some special considerations, mostly having to do with access and right of ways.

buy something that has road access to it. If you end up buying a piece of land sourounded entirely by other private property you need to get an easement allowing you legal access to your land through a neighbors, nothing but potential problems.

If you can find something that has direct road access, you also want to make sure that it has power available at the road, even if you dont plan to build on it for twenty years, the cost of bringing it in on your own can be astronomical.

resale is going to matter, generally, the cost of land never goes down. look out for large parcels of land that seem to be way to cheap. they are usually either 90% swamp, or they are about to have a power line, gas line, or some other government right of way coming through them, and the owner is trying to offload it before it happens.

I looked into the same thing a few years ago, ended up buying a house instead, but always wish i had the land. good luck.
Good summary ^^^.
I am also looking for land, so I am going through the same questions.
You are never too young to buy property. If you do not spend it on the mortgage you might start wasting it. Once the property is paid off nobody can take it away from you and it will hopefully be worth a lot more at that time. Not a lot of young people think in terms of investment, so good for you.
However, you might want to consider:
1. Will you always live in the same area - what type of work do you do or plan on doing - will it require relocation to the other side of the country?
2. Keep in mind that there is more than just the mortgage. There will probably be property taxes and maybe maintenance of fences etc.
3. Is a house a better option at this time? (I personally think land is, but I am biased because I am looking for land myself)

Good luck.
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Old 01-25-2012, 03:26 PM   #16
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WOW. I appreciate all the great info. Basically as I said, I am 21 right now with minimnal expenses. Not really looking to buy a house anytime soon until I establish myself with a career in law enforcement. Having said that, I'm not really looking for land that has a house on it. If it does, great, I suppose that is an added bonus. However, I am reallly looking for say anywhere from 30-100 acres to be able to hunt and ride atvs on... Would I build a house on it? eh maybe, but that'd be probably sonething I'd do when I retire. I am looking for land in the southern part of the state, but I can't say that I will be working there if I do get a job. The distance isnt an issue from me as long as it doesnt take me any longer than 2 or 3 hours. You know, kind of a like a weekend retreat or something. I've always hunted on other people's land I would love to be able to call a parcel of land mine. I figured at this age, by the time I have retired, I could have it paid off...

I realize there is a lot to consider, hence, why I am asking you intelligent individuals. I'm really hoping I can get my dad to buy into this as well, that way it'd be cheaper for both of us.

Obviously it may depend on the financial institution, but do they do 30 year mortgages on land? How about more than 30?
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