Q&A / 

Lot Selection

Selecting a New or Existing Building Lot

When my wife and I purchased our first house 22 years ago, I didn't give one ounce of consideration to the lot that it sat upon. I simply walked into the house to see if it was beyond repair. I was oblivious to the 15 steps it took to get to the front door. I didn't know exactly where the property lines were. There was a fence along the two sides and the rear, but I couldn't tell you if it belonged to the house or to the next door neighbors.

My wife and I were young and just out of college. We had no experience in dealing with real estate. Playing Monopoly had been my only previous exposure to deeds, mortgages and utilities! Let me tell you, there is no comparison to the real thing!

"Real" Estate

When you own land, you have a real asset. More often than not, land tends to appreciate in value. Improvements upon land such as houses, barns, fences, etc. all tend to lose value immediately after construction due to depreciation. That is, they immediately start to wear out.

Of course, some building lots are worth more than others. They will appreciate faster. Why? Because the lots that grow in value at the fastest rate tend to have the highest number of positive qualities. A lot may have a great view. It may be in a desirable neighborhood. A lot may have mature trees. There are numerous positive qualities. Some of the qualities are subjective. Things that appeal to you may not appeal to me. Most of the qualities are objective. Things like utilities, zoning, flooding, etc. are a concern to just about everyone.

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