If you’re planning on building your dream home or an investment property, let me first offer my sincerest congrats! It’s an exciting venture to undertake and one that you should most certainly be proud of.
Let me ask, have you found the right plot of land to build on yet? Or are you overwhelmed with options that you’re just not sure how to compare them all?
I get it. A lot of the blocks probably look the same, are a similar size (sqm), are in your preferred location, and would perfectly suit the vision you’ve drawn up in your mind. If only it were as simple as picking a nice plot of land for the right price. Sigh.
The block of land you decide to build on could easily make tens of thousands of dollars' difference in construction and maintenance costs should you make a hasty, ill-informed purchase. Don’t forget that you could also end up regretting the choice in the future, which you definitely do not want.
Close your eyes and imagine the following scenario…
You’ve been searching for what feels like forever for your dream block of land. A new plot comes up that seems to be a good deal and will accommodate the house you’re planning on building.
You sign on the dotted line without a second thought.
But without knowing, you didn’t conduct a soil test or include a ‘subject to a satisfactory soil report’ when making your offer. And unfortunately, the foundation you laid has cracked and become damaged due to the quality of the soil. Here come the extra costs - reinforcements, additional excavation, additional drainage. One’s that you didn’t budget for. Big uh oh.
While this may sound a little dramatic, you want to ensure you ask all the right questions to avoid potential future headaches. So, to help you out, here’s eight things to look out for when you’re hunting for a block of land.
See Also: The cost of building a home in Australia
The 8 factors to consider when buying a plot of land
1. Location
I know, I know, this is probably the first thing you’ve thought about and haven’t stopped thinking about. So why am I even including it in this article? It’s not like you would go and choose the first block you find without thinking about its location and how that might impact your lifestyle down the line…
I trust you have better judgement than that.
Even so, I believe it deserves a spot in here just to be sure. Especially since the one thing real estate agents rave about is “location, location, location.”
The location of your block of land needs to be in an area that ideally, makes the most sense for you now and later on. Consider the nearby amenities that will make your life easier - schools, shops, restaurants/cafes, medical facilities, public transport, parks, access to highways, etc.
Think about it. Would you let your kids walk five kilometres every day just to get to school? Mmm I think not. The same goes for you too. If you work in the city and need to catch the train, you don’t want the nearest station to be located 20 minutes+ from home. That just adds unnecessary travel time to an already busy, tiring day am I right?
Speaking with Savings.com.au, Brisbane Property Developer Carl Yap said location always plays a big part when buying a block of land.
“One of the first things that crosses my mind is, why would anyone want to live there,” Mr Yap said.
“You need to consider the overall lifestyle factor, whether it’s close to good schools, major shopping centres, and small villages with cafes and the like.
“When I was looking to purchase a block of land to develop on Brisbane’s Northside, one thing that caught my attention was the location and the view. The block I found had plenty of nearby amenities and had views of the CBD all the way to Fisherman’s Island, for a reasonable price.”
If you’re planning on selling or renting out the property, access to the above amenities could make your house more appealing to buyers or tenants. It’s highly likely that the things you find desirable will be similar to what they like, if not the same. Plus, the right block in an area with high growth provides the potential for your investment to fetch better returns in the long run.
Make of that what you will.
2. Size and shape
Your block will have to accommodate the house you’re planning on building.
Allotments come in a variety of shapes and sizes - square, rectangular, flat, sloped, etc. There are corner blocks, battle-axe blocks, low-lying blocks, blocks that back onto a railway, and many many more. Each type of block will present its own unique challenges when it comes to designing your home. It’s up to you to find one that will fit exactly what you’re after. You don’t want to buy a block only to realise you can’t fit in the 12 metre pool you were hoping for. Those summer days are looking a lot sweatier…
AVID Property Group General Manager for Queensland Bruce Harper said the size and shape of your block will have the biggest impact on your floor plan and home design.
“A small block can save you money and allow you to be closer to amenities whereas if features like an alfresco entertainment space or in-ground swimming pool are a must, the length of your block will be an important factor,” Mr Harper told Savings.com.au.
“Considering the right size block for your budget, lifestyle, and home design is key.”
It’s worth noting the more ‘unusual’ blocks of land such as a battle-axe, may be more difficult to sell when the time comes as they aren’t highly sought after. However, don’t take them off your list. Irregular blocks like a battle-axe usually come with a cheaper price tag, while corner blocks allow for the potential of subdivision.
3. Orientation
I have to say, this is one thing I overlooked when buying my own block of land. My house doesn’t get too much natural light, it’s actually pretty dark most of the time even with all the doors and windows open. Sigh. I could make an excuse and say the purchase was kind of rushed cause there weren’t many available blocks left for a decent price. But still. It should’ve been on my radar. Although, I do get really nice bay breezes which is something.
But, do not make the mistake I made!
Paying attention to the orientation of the block of land you buy literally pays off.
“There is a lot to be said for designing your home in tandem with the land’s orientation,” Mr Harper said.
“Using the north-facing aspect, for example, allows your home to use the sun all year round without enduring direct sunlight, which can lead to overheating and discolouration on certain materials.”
Having a northern orientation could also positively impact your electricity bill - I wouldn’t say no to a couple of extra dollars in my pocket!
4. Slope
A sloping block with a view of the CBD may be difficult to resist. Yet, more expensive in the long run.
If a block has too much fall, it’s likely you’ll need to pay a lot more in site costs in order to get the land level prepped for construction. Generally speaking, a slope over one metre will mean your block will need to be cut and filled to ensure it is level - retaining walls may also be necessary. All of this adds up.
Similarly, if your block is located below street level, water runoff and drainage could also be a potential issue.
5. Easements
The legal definition of an easement is “the right to cross or otherwise use a portion of someone else’s land.”
Wait, what?
Well, it means that you can’t build over a particular portion of land because it's essentially like sacred ground.
No, not like a cemetery.
It just means that a utility authority or nearby landowner has the right to access a portion of your land for a specific purpose. For instance, a utility provider needs an easement to access electrical wires or cables on your land.
For this reason, it’s important to check the ‘land title’ to see if there are any easements or covenants affecting the land that will place restrictions on which areas of the land can be built on and any specific building and design requirements for the home.
6. Council restrictions/estate guidelines
Say hello to your new best friend, research.
Just like you researched and studied before a year 12 final block exam, you also want to take the time and do the same when it comes to council restrictions and planning requirements.
If you winged your year 12 exams, and passed I might add, I have to say I’m pretty impressed. But keep in mind that’s probably something you don’t want to do when buying land to build on, especially when a lot of money is riding on your final decision.
Different councils can have different rules, which can limit what you build and how you build it. Each local government can have its own requirements relating to home size, setbacks, offsets and appropriate building materials, among many other things.
As someone who has gone through the process many times, Mr Yap said research is important to identify the hidden issues that may be lurking right under your nose.
“For example, is the block on a contaminated land register? Has it been flagged by local or state council as a block that may be impacted by possible future road developments? These sorts of things are good to know beforehand otherwise they can turn into nasty surprises,” he said.
“A good solicitor will provide you with a long list of the possible searches they can do on the block and the fees related to each service.
“I usually go through the list and pick out the ones I think might be relevant and ignore the ones that aren’t.”
To find out the council limits on a given block of land, Mr Yap said you can visit the relevant City Plan.
“It used to be hard to navigate through the City Plan, especially in the days before the internet,” he said.
“While it can be a little difficult to find the right regulations that apply to a particular block on the City Plan, you can do it yourself if you persist and have the time.
“But if you do have the money to spend, you could always hire a town planner to do that sort of background work for you. They’ll be able to tell you exactly what the block is zoned for, the limits of what you can build on it and many other considerations you may find useful.”
7. Soil
An excellent investment you should make is to have a soil test administered on your block (if one has not been done previously).
This is necessary as a block with an unwanted soil class, such as E, H, or P, can be very costly to stabilise. The ideal soil should fall under the 'M' classification, which would mean it is already stable to an acceptable degree.
Consider including a ‘subject to a satisfactory soil report’ when making your offer on the block.
Likewise, blocks which are rocky or in need of tree removal will cost more to build on.
8. Utilities
Can your land be connected to all of the utilities that you’ll require? Is the water, gas, electricity, internet, storm water, and sewage already pre-laid?
Fortunately, in most cases, connections to these services will have already been arranged. However, in undeveloped/rural areas, you may need to install major infrastructure to connect your house to the necessary utilities. This can become quite costly as your choice of providers may be limited, or incur additional costs because of the added distance or the lack of existing connections.
Do you need to find a block of land before you hire a builder?
Which came first? The chicken or the egg?
I personally think the egg but hey, that’s not the point.
Let me try again.
What comes first? The land or the builder?
Por que no los dos?
Enough shenanigans from me. The straight answer is no, you don’t need to have a block selected before finding a builder.
Mr Harper said the decision ultimately comes down to you, and you only.
“Deciding to buy a block before hiring a builder comes down to the buyer’s personal preference but it is recommended your decision considers both your financial circumstances and design preferences,” he said.
“It is important to conduct research and educate yourself first about builders to understand what they specialise in.
“Builders can also provide guidance and recommendations from the beginning of the process to help you make informed decisions about your dream home.”
If you’re confident you can choose the right block that’ll fit the exact home you’re after, then go ahead and buy the block (go you!). But, if you’re a complete newbie and want the professionals to help you throughout the whole process, then by all means, find your dream builder and they’ll get you on the right track.
See Also: What happens when your builder goes bust? A guide
Savings.com.au’s two cents
As someone who’s bought a block of land before, trust me when I say I know exactly how you feel.
Buying a piece of dirt may seem like an easy job to some, but it’s far from that.
If it’s proving to be a little too much, you could consider a house and land package instead - most of the work is already done for you.
“Purchasing a block of land may present a complicated process for some which leads buyers to purchase an established home or a house and land package,” Mr Harper said.
“That’s why buying land in a master-planned community or residential development presents buyers with a straightforward and transparent process.”
Seems a bit simpler, right?
But don’t forget that you could always seek professional advice before signing on the dotted line. That way, you could avoid being hit with some nasty surprises.
“Unlike buying an established property, the process of buying a block of land comes with differing costs,” Mr Harper said.
“That’s why it’s incredibly valuable to understand your budget and seek professional financial advice before starting your search.
“Speaking to a mortgage broker at the start will help you have a better understanding of your loan capacity and a better understanding of your total property budget.”
Read More: How to finance your block of land
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