3 Things to know when buying vacant land

Business Professional Planning to Buy Vacant Land

1. Cash is King

To be eligible to buy vacant land, major banks and financial institutions typically require that the entire property be paid cash (if not, a significant portion thereof). The reality is that banks are generally quite reluctant to grant 100% bonds on vacant land, and furthermore considering the cash-flow dynamic involved, the prospective investor needs to be reasonably “financially sound” before considering buying land for further development.

2. The time and costs involved

The process of buying and developing vacant land takes some cash flow planning. Depending on your intended plans for the development of the vacant land, banks typically offer finance systemically as a particular building project progresses. Costs associated with the purchase and development of vacant land include land survey costs, maintaining the land to an acceptable standard and obtaining a building permit above and beyond regular rates and municipal charges.

Furthermore, If your building plans do not comply with zoning restrictions or you want to apply to have the land re-zoned from say residential to commercial, there are further costs and valuable time involved in getting approval from local council – time which costs money and needs to be budgeted for. There are exceptions – such as the prime vacant land current for sale in Falcon Crescent, Airport Industria, which offers prospective investors with great flexibility with the option to us the area for a warehouse, distribution centre, offices or yard space at approximately R2,200 per square meter.

3. Location, location, location

The age old importance of location applies more to vacant land than any other type of property. Before investigating any locations with vacant land for sale, it is important to clearly stipulate your business objectives and goals you want to achieve with the vacant land. A logistics operation requires secure, central access to main arterial routes, whereas a retail operation needs to be closer to its customers with ample parking. For example, our vacant land for sale in Airport Industria offers central access to the N2, N1, R300 and Borcherds Quarry Drive making it ideal for an established logistics company. Furthermore, it is important to know what is going on in and around the area as new or adjacent developments may influence resale value of the property and business.

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