Buying land now to build houses on later?

June 5, 2011 5:15 AM

My cousin and I live in separate parts of the country currently, but we'd like to go in together on a 10+ acre piece of land roughly 30 minutes outside of St. Louis now with the intentions of both building on it several years down the road. What are we not considering?

We'd like to buy the land now-ish and have it paid off by the time we move our families and build separate houses on the land several years down the road.

Assuming the land has access to the electric and water grid, is it reasonable to assume that building a house from scratch on the land is roughly equivalent to buying a house of relatively the same size in a nice neighborhood? Surely there will be costs associated with living in the sticks that you would not have in a city neighborhood (and vice versa), but what I'd like to confirm that this can be done without being a millionaire. Can you build a modest house on land in the country without having a rich uncle?

What other things should we consider before pulling the trigger on this?

posted by wordsmith to home & garden (20 answers total)

Will it be possible to divide the title in future? Are there council regulations about what can and cannot be built on your kind of land?

What happens if one of you has financial strife and has to pull out?

You're family, yes, but make sure you get a contract about your agreement signed and documented.
posted by titanium_geek at 5:22 AM on June 5, 2011 [2 favorites]

Adding insurance policy to cover mortgage in case of death and will stipulating heirs, same.
posted by likeso at 5:28 AM on June 5, 2011

The division of the property is probably the biggest issue here. Who owns what? What happens when someone dies? Are there easements you're going to need? More than that, just because the plot is 10 acres doesn't mean that it's capable of supporting two houses. The zoning may not permit more than one dwelling, and subdividing may not change that.

But no, building a single home is not necessarily the same as buying one in a neighborhood. Neighborhoods tend to be built as larger projects, with a single contractor doing work on multiple homes. This permits significant economies of scale that you sacrifice for a one-off job, both in terms of labor and materials.

Still, people buy land and build houses all the time, and while it does help to have some money, the kind of equity that most middle-class American families have in their houses is probably plenty.
posted by valkyryn at 6:25 AM on June 5, 2011 [1 favorite]

As you probably already know, St. Louis has some sprawl issues.

Ten acres, a half-hour outside the city, might be big enough and far enough that you don't have to worry about that much. And it's impossible to completely know the future, but it would be good to be fairly confident that, ten or twenty years down the line, you won't be neighbors with a landfill, a gated golf-course community or a maximum-security prison.
posted by box at 6:30 AM on June 5, 2011 [1 favorite]

What happens if you don't want to delicate at the same time? Do you still have to build at.the same time so one if you doesn't have to live there whilst the other one still builds?

What happens if one of you needs to move away? Sell up? Third party tenants?

What happens if inequality of you decides in a few years that you no longer want to relocate there, can't afford to build or has a spouse who doesn't like any part of that plan?

You need to go to a lawyer and you need to get a contract which covers these and any other points I have forgotten.
posted by koahiatamadl at 6:55 AM on June 5, 2011

Delicate - relocate
Inequality - one of you
posted by koahiatamadl at 6:57 AM on June 5, 2011 [1 favorite]

Not be glib, but aside from the obvious legal stuff, a tornado.
posted by timsteil at 7:09 AM on June 5, 2011

Is there a specific piece of land in mind? Does it have good sites for two separate houses? Accessible water- will you need to drill wells? What about zoning? Some rural communities have tried to stop suburban sprawl by enacting minimum sizes for lots. Where I used to live in upstate NY our township set some areas at a minimum of 5 acres per house.

As to building, it's going to depend on what you think you need. Small energy-efficient houses can be built fairly cheaply, especially if you do some of the work yourself.

Have you considered buying the land and then subdividing it into two separate legal parcels?
posted by mareli at 7:13 AM on June 5, 2011 [1 favorite]

You need to look at whether you'll be able to get permission to build ("is the land entitled for two houses?")

You might also think about where the cost of gas will be at in ten years and how often you'll have to drive to town.
posted by salvia at 7:16 AM on June 5, 2011

You'll be able to get both closer to downtown and further from sprawl if you go across the river into IL. It's not spreading nearly as fast to the east. My father lives on 7ish acres 45 minutes east of downtown. (He's also 5 minutes outside a small town. Gas stations, grocery store, churches, schools. etc. It's not the Sahara desert. )
posted by Green Eyed Monster at 7:28 AM on June 5, 2011

My neighbor is selling his stunning, amazing home because he can't get zoning permission to build a second house on his 10 acres for his daughter. Zoning is definitely a consideration.

Friends in GA had the same idea you have, and together bought a lovely piece of property in the Blue Ridge Mountains. They left it unattended for a few years. The next time they visited, they found a still on their property, and someone took a couple of shots at them as they were leaving. You may not run into moonshiners (one hopes!), but you still might run into someone using an apparently abandoned property and unhappy about the owners showing up. You'd want some way to regularly check the property until you move there.
posted by galadriel at 7:52 AM on June 5, 2011 [1 favorite]

Are you near enough to keep an eye on the land? Do you have someone you trust who can keep an eye on it? I've read accounts of squatters taking over unsupervised patches of land and then getting ownership... I believe the law in question is something about doing something useful with the land plus of course possession.
posted by L'Estrange Fruit at 8:32 AM on June 5, 2011

Is that land part of a flood plain?
posted by Chocolate Pickle at 9:56 AM on June 5, 2011 [1 favorite]

Are you near enough to keep an eye on the land? Do you have someone you trust who can keep an eye on it? I've read accounts of squatters taking over unsupervised patches of land and then getting ownership... I believe the law in question is something about doing something useful with the land plus of course possession.

It's called adverse possession, which is usually difficult to prove in court, as the land must be held "openly" and "hostile against title" for something like 10-15 years, varying by state. But yes, leaving empty tracts of land around is a bad idea, even if you don't lose title in court, if someone comes along and builds a barn or a gas station there or whatever, you're going to have to spend a good bit on lawyers to quiet title and get them out. Put up a fence or property markers at the very least, and check on it in person at least yearly. Don't just assume it's still sitting around waiting for you.
posted by T.D. Strange at 10:15 AM on June 5, 2011

In addition to electric and water, be sure you know what you're going to do about sewage. It's not always possible to put a septic field where you want one.

As T D Strange suggests, I think it'd be a very good idea to visit the place at least once a year, walk the bounds, maybe say hello to a neighbor. Not just to make sure nobody's building on your land, but also so that you're familiar enough with it to build the house you want when you eventually do.
posted by hattifattener at 12:01 PM on June 5, 2011

Yes, hattifattener brings up a good point about septic. Usually you can get what's called a "perc test" from the local health department or sewer authority (or somebody, jurisdiction varies) that tell you whether and where you're allowed to put a septic field on the property.

Also, don't take water for granted; depending on where you are, you may or may not have access to city water. If not, you'll need a well. You can talk to your neighbors to see how deep their wells are to get an idea of how expensive it will be to find water on your property.

And last, one other thing you might take for granted is road access to your land, but that's not always the case either. Make sure that, if your land doesn't front on a public road, that it comes with an easement through one or more of your neighbor's properties to allow you legal access to get there.
posted by jonathanweber at 4:12 PM on June 5, 2011

It's called adverse possession, which is usually difficult to prove in court, as the land must be held "openly" and "hostile against title" for something like 10-15 years, varying by state.

Rent it out to a farmer. Problem solved.
posted by IndigoJones at 4:20 PM on June 5, 2011

Make sure you visit the land in the coming year in all kinds of weather, especially when things get particularly wet. This will enable you to see where the water is draining and where it is pooling, this will help you select a good building site for your home.
posted by Vindaloo at 6:01 PM on June 5, 2011

I think the wisest course of action would be to buy separate, but neighboring, properties rather than trying to share one, unless there is a financial reason to do so (ie, someone has bad credit or whatever). There is way too much that can go wrong in the meantime and at build time, otherwise.

Also, ten acres is a nice chunk of land, but it's not going to put you in the middle of nowhere regarding neighbors, etc. Five acres is a lot of lawn, but not a lot of buffer if that's what you're after.

We owned a lovely ten acre parcel. It was all buildable and nice, but there was one spot which was clearly the cream of the parcel for a home site. Almost every parcel is going to be that way; make sure you think about that as you're looking.

If you do go in together, please get all specifics in writing up-front. If you're going to share a well, what happens when you want to build five years before your cousin does? What happens if you go broke and they don't? What happens if a beat-up single-wide is what they want to live in because "it's a roof over my head and it cost nothing!"
posted by maxwelton at 9:42 PM on June 5, 2011

Not really your question, but make sure you and your cousin have a very clear (signed?) agreement regarding what happens when one of you needs to sell the land, or when one of decides he can't possibly live there, or when one of you dies.
posted by AmandaA at 8:30 AM on June 6, 2011