Considering buying vacant land in Chicago? Here are the steps to follow:
Step 1. Why Land
Before buying vacant land in Chicago, IL, ask yourself: what is my goal with land? Will I be reselling the land after my purchase? Am I looking to build on this land? If so, what am I going to build? Am I looking for commercial or residential land? These answers will guide you to finding your ideal purchase.
Step 2. Locate the Land
There are a handful of ways to find vacant land to buy. First of all, you can call us at 312.313.9505. and we can help you find what you are looking for in Chicago. You can work with a Realtor who has access to the multiple listing service, or MLS. You can also find properties for sale by owner on public posting boards online. There are also public auctions held by cities and counties in IL that frequently offer vacant land for sale, mostly due to unpaid taxes. Working with a real estate professional might be ideal if you are new to buying vacant land, they know the tips and tricks of the trade.
Step 3. Evaluate the Land
Real estate professionals have easy access to most sources of information for research on vacant land. It does not hurt to do your own research, just to double check.
Search the county records for the deed and ownership history. There should be a nice, clean chain of owners from one to the next. If not, there will have to be legal paperwork done that takes time and costs extra money. Make sure to look up the property taxes, if there are any open certificates and you purchase the property, the owner might be able to take the property back from you before the waiting period is over, typically 4 years.
Look into the current and future zoning of the vacant land, will the municipality’s plans interfere with your own? Will you be able to request an exception? Are there any deed or usage restrictions or building requirements?
Review the physical characteristics of the property, will it be large enough for your plans? Is there an excessive amount of clearing that needs to be done? Is it on a canal? Does it have direct access to tap into the utility system? Are there plans for utility expansion? Check into the plat maps and any surveys available to make sure there are not any surprise easements you are unaware of.
Step 4. Finance your Land
You’ve found the vacant land you want to buy. Now it’s time to fund the closing! How are you going to do that? Do you plan to pay cash, or do you need a loan? It is a lot more difficult to buy vacant land with a loan from a bank than it is to buy a building, residential or commercial. There are only a handful of banks that will loan on raw land, and they usually require a much larger down payment. Another option would be to form a partnership to invest in vacant land, and you may form an agreement to pool your funds to buy a larger portfolio of land with larger returns!
Step 5. Hold your Land
Now that you’ve purchased your land, what is your holding plan? Are you going to flip it right away, or will you hold it for a few years? Keep in mind, the faster you make a profit, the larger tax you may have to pay. The longer you hold it, the less capital gain tax you will have to pay, but keep in mind there are usually annual taxes and possibly owner’s association dues.