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According to the USDA, in 2021 the average cost of one acre of vacant land in the United States was $3,160.
Land is more affordable in some states than others. How much an acre of land costs varies a lot based on location. For example, an acre plot of land near the ocean or near a major metropolitan center is worth more than vacant land out in the middle of nowhere.
If you are planning on building a home, you should know that these days a new single-family house is situated on about one acre of land. However, that doesn't leave you with much space for recreation, such as a large yard or other amenities. For that reason, you might want to situate your home on a two to five acre plot.
Whatever your reason is for buying land, we will walk you through how to buy your first piece of vacant land.
Looking For Land
The location for your land is going to be determined by what you are looking to do with it. For example, if you are buying land to camp on, you would be looking for something in the woods or nearby water.
After you’ve determined how you want to use the land and where you want to buy, the next step is shopping around. Look for any “For Sale” signs in your desired location.
These days, many listings of land for sale are posted online.
Some of these include:
- Craigslist – You are probably very familiar with this buying and selling site. Listings change at the drop of a hat, so stay on top of them!
- Loopnet – Currently, there are 500,000 property listings on this site.
- Land And Farm – This site features more than 10 million acres of residential, commercial, farms and ranch properties.
- LandWatch – This site has many different land types and also lists international locations, which many services do not.
- LandSearch – This platform includes more than 10 million acres of land, making it one of the largest land listing sites. Included in their listings are residential, commercial, recreational and agricultural land.
How Is The Land Zoned?
Zoning refers to approval by the municipality for how the property can be used, such as residential, multi-family, commercial or recreational, and you will need to adhere to them. Sure, you can make an appeal to the local zoning board. However, this is a time consuming process and it is likely your request will be denied.
Before buying, make sure the zoning matches up with what you plan on doing with the land.
Financing to buy land depends on many factors, including the amount of money you have to put down, your credit history (which should be around 720 or higher), and your debt-to-income ratio, to name a few.
For land loans, it’s usually simplest to work with a bank or credit union that’s close to the property you wish to buy.
It’s helpful to use an online loan calculator for a ballpark idea of what type and amount of you qualify for.
Keep in mind that land loan interests rates tend to be higher than mortgage interest rates because they are riskier. The percentage of down payment depends on the value of the land and the amount of cash you have on hand, among other factors.
Since financing a land purchase is often challenging, many will instead save up enough money to make a cash purchase.