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Successfully Buying Homestead Land
When you’re buying homestead land, you want to be sure it can sustain your homestead. There are some key elements, more critical than price, that you have to consider. Indeed, you don’t want to buy homestead land out of your price range. But you don’t want to overlook a great piece just because the price is below what you think it should be. Remember, cheap homestead land can be listed as foreclosure or may already have structures. None of these are reasons to pass up a piece of land. You can clear outbuildings on a portion of the land. You can always learn how to purchase foreclosure land! Honey Homestead also has an excellent selection of Ebooks and Courses with lots of useful information.
1. Access Rights
Access rights aren’t something we usually think of. We always assume that no matter where we go, there will be a road that we have the right to travel on. Buying homestead land can be a different thing. There may be a road that gets you access to your property but are you actually allowed to use it? What are the access rights for the road? Are there easements that affect how much usable property your cheap homestead land has? Are you responsible for maintenance? Usually, your real estate agent should be able to provide you with the information, but if not, you’ll have to go searching at your county offices.
Knowing your access rights and any responsibilities that come with them is critical to your ownership. If you don’t know your contractual obligations upon purchasing, you could find yourself in quite a mess. Plus, you want to be a good neighbor.
Our first year here in the PNW, we received a CPA statement showing amounts due for the road maintenance account. My parents were shocked and surprised. They double-checked our property’s access rights and responsibilities. We don’t have to pay for road maintenance (though we have always willingly donated when asked). This issue of rights and responsibilities has affected other areas of ownership. For example, every time my mother has spoken to a bank about refinancing, they have to independently verify that my parents do not owe this maintenance money.
2. HoA’s and CC&R’s
Homeowners Associations, and Covenants, Conditions, and Restrictions affect what you can and cannot do when buying homestead land. Even cheap homestead land that seems undeveloped may have been purchased by a company with intentions of development. Or land was purchased by a group of people and then subdivided, and they put conditions on what kind of neighbors they wanted living next door. Learn whether these restrictions apply to your land and what, specifically, they are.
We found that overwhelmingly in South Dakota, most properties had CC&R’s restricting not just what kind of building you could build but also what animals you could have on your property. Many were beautiful parcels of acreage that wouldn’t allow any livestock or allowed, at most a single horse. That didn’t work for us – we have goats, ducks, chickens, and every intention of expanding our farmyard, so we had to find something else.
If your parcel is full of trees, you want to know if you’re buying homestead land with the right to chop them down and sell them. Sometimes you may not get this right till your deed is in hand, but that’s much better than some of the other options, such as a logging company owning the right to come in and log your property.
Mineral rights are even more important – you want to know for sure who owns the rights to any precious metals or stones or mines found on your property. If someone else owns your mineral rights and finds a reason to mine your land, then you could be facing a significant bit of trouble.
You’re homesteading. Whether you choose to have livestock, grow a garden, or just enjoy having a lovely parcel of land for your home, you need water access. Look first for properties that have a creek on them or river access with water rights. I can think of few things worse when buying homestead land than purchasing land with water access and then not being allowed to build near it. At the very least, you’ll want to know there is water beneath the ground that can be pumped up via a well. If you don’t have a water source, you’ll have to pay to bring one in and pay to have it regularly filled.
Is your homestead property close to a city road? Unless you’re close enough to tap into an established sewer, you’ll need a septic system. You want to have a PERC test performed before you buy homestead land. A PERC test checks your property for soil drainage to see if it can even support a septic system. If it can, the PERC will also tell you what kind of system your homestead land can handle. If your soil fails a PERC, it may be time to look at a different parcel.