Purchasing a Vacant Lot Next to Your Dream Home: What Buyers Should Consider

Looking for a new home to buy can sometimes lead you into finding additional deals that can make a great investment to your potential property. You may discover a great house to purchase in an ideal neighborhood that can give you all the features you need. Yet it is the adjacent property that has piqued your interest. Next to the house is a vacant lot with overgrown grass and a "For Sale" sign hanging lopsided on a post. Before leaving the showing, you may find yourself considering the possibility of buying a vacant lot.

Advantages to Buying the Vacant Lot Next Door

Many people may be turned off by the conditions of a vacant empty lot next to a house that is on the real estate listings. Yet there are many reasons why it can be a great investment for you.

If the house has a small front yard or backyard, you can purchase the adjacent property to increase yard space. This circumstance is ideal when you have a large family with kids. You also know that nobody else will be building a home on that vacant lot, giving you greater peace of mind and privacy.

Some states also offer incentives to people to spur them to purchase adjacent lots when buying a home. Called "Lot Next Door" incentives, you may be offered money and resources to purchase and revitalize the lot to increase the curb appeal of the property as well as the neighborhood.

Lastly, you can turn the vacant lot into investment property by building on it. Then you can rent out the property to make a secondary income or sell it outright for a profit. You can choose the neighbor you want to have, as well as place certain conditions on the purchase of the property that could be an advantage to your own home, such as having fewer windows face your property to maintain your privacy.

Things to Consider When Purchasing Adjacent Lots

Keep in mind that you will have to pay higher property taxes when you are purchasing both your house and the vacant lot next door. Also, if the owner of the vacant lot is aware that you are buying the other property, they may try to increase the sales price knowing that you are a motivated buyer. So be careful and check the real estate market to see if there is any sudden mark up to the asking price. You should be able to get the property at a reduced price from a property owner who doesn't want to deal with the continued maintenance and upkeep of it.

If you don't see any sign on the property that shows it is for sale, this situation doesn't mean that you can't still make an offer for the property. You will have to do some research gathering at the property assessor's office to find out who is the owner of the lot and whether they would be interested in selling it.

Some property owners don't consider purchasing the adjacent property because they think that they have to take out a second mortgage. Yet some lenders will allow you to add the lot to your existing mortgage when deeding it onto your property.

Purchasing a Lot May Be Ideal for You

You will have to sit back and figure out your finances in paying a higher mortgage, property taxes and maintenance when purchasing an adjacent vacant lot. Often, the deal is worth it if you plan to be staying in the neighborhood for the long term and if you can use the lot for other purposes to enhance the functionality and curb appeal of your home.