If you're set on the location and it will work for the house you envision, then of course it makes sense to buy it. We bought our lot three years ago and will hopefully build next spring. I had my eye on that lot for ten years before I got a chance to buy it, so I jumped on it. If there's other development around it you do need to be mindful of that, but you can wind up with bad neighbors anywhere.

We had our land bought for about 2 years before we started building our previous house.

We bought our lot 6 years before we built (didn't know it would take that long to begin), from a man who had owned the lot for 10 years and never built because his wife died. By the time we built, all other houses in the sub had been constructed, so we were able to position our house to get the best views and avoid views of most of the other houses.

The lot had a dog-leg halfway back and wet lands and a river on 3 sides which limited the building site, and neighbors on each side who had built closer to the street than the other houses due to the wetlands, so we turned the house about 40 degrees and spent a lot of time working out how far forward or back to put the house, making sure it looked good relative to the orientations of the other houses.

So there are advantages to building later rather than sooner.

Anne

Buy now. If you change your mind you'll have a gain on your purchase.

As long as the other homes that are built in the neighborhood don't set a standard you can't meet when time comes to build, go ahead. You can probably always sell the land if the homes around it go in a direction, style or dollar wise, that doesn't work for you.

I think it depends on where the lot is ? If it is in a subdivision cahnces are you will have a finite timeline to build but if it is acreage in the country with no HOA then go for it.

Some developments require that the home be built within a certain amount of time. Make sure to do your homework to ensure that you will not have a looming deadline for completion...

That's what many do. Even those who "plan to build right away" often drag their feet.

Some CCRs have requirements to build, with developer buy back provisions but I don't remember seeing any enforced as its costly.

Most lots increase in value over time, but during the 2008-2014 "recession" many could be had for 1/3-1/2 or peak prices while owners bailed out.

check covenants also if buying in a neighborhood. some require construction in set amount of time.

While you're doing your homework, also check on what maintenance you'll be responsible for. Will you need to mow, weed, etc? If so make sure you're close enough that you're able/willing to do that.

We bought our land almost 3 years ago with the idea of building that year. We ended up spending months looking at plans and then went with a architect. Our property is within city limits but residental acreage. We will be on city water but need a septic tank. There are so many things to consider when buying land and building vs buying a already built home. we also have to keep the property mowed and pay taxes on the land.

Will you be able to save for a down payment for your future build? And do you have a realistic idea of the cost to build? If yes, go for it!

You really need to talk to someone in your area who knows the tax rules and any restrictions on the land you want to buy. Others have already mentioned that developments may have a requirement to build a house within x years of buying the land. I have also found that interest rates on an land-only loan are higher, and some lenders only allow a 10 year loan for a land purchase. However, I was also offered an interest-only loan option for land, so payments were relatively low.

In some areas you might have cheaper taxes on land-only because its considered farm/ranch property and is taxed at agricultural rates. However, to keep those rates you might have to really use it for agriculture - how many cows do you want to buy?

Bruce

Before buying raw land, hire a land planner.

The timing to buy real estate is of concern for me.

I am a licensed real estate agent that does commercial land.

I was looking to buy land to build a home,too, recently. I was approved for loans with a great fixed interest rate. I was looking at land. Then my husband who is a contractor told me he was getting concerned about the building material costs & short supply due to virus. So we started looking for a fixer upper house instead on land we liked. Then the prices & bidding wars became another red flag. We decided to keep an eye out but watch approach for now.

Currently real estate sales prices are high. It's a seller's market dream come true.

Now record-low mortgage rates and shortage of inventory are keeping the US housing market strong with respect to buyer demand. Both prices and sales have been surging month-over-month breaking new records. Prices are super inflated right now.

I am waiting to buy land or a home at the moment to see what will happen after the government coronavirus help ceases with mortgages. Once people need to start making mortgage payments again, we may see a flood of foreclosures come in due to many businesses that closed. This may bring prices down to a more reasonable figure.

If the vaccine goes well, that may offset the effects & the real estate market will stay strong. We will see.

I also wonder if construction material prices will go back to normal, they too are super inflated. There's just a lot of uncertainty out there.

Land prices do not always go up.

My parents bought land to build on years ago, they were shocked when the 2008 bubble knocked their land value down 25%. They waited until it recovered 6 years later while still paying taxes & HOA fees. They decided not to build & sell it for an ok profit 20 years after buying it. Their gross was $30,000 over what they paid for it minus whatever yearly taxes & HOA fees they paid.

With all that said, if you find the perfect land, maybe buy it. But if there's several lots around, then you may want to do the wait & see approach.

I think a good piece of land in a good area will always appreciate and become more expensive to buy later. If you've done your homework and know the lot is buildable and suitable for your needs and you can easily afford it then do it! Definingly look at due diligence items like utility and water access, building set backs. If in a neighborhood - need to understand the ARB/ HOA build requirements and that they align with your build budget and build ideas.

Before buying the land please be sure to check with your the existing survey or you local zoning off to see what sort of restrictions and building setbacks are in effect. That goes for buying now or later. Keep in mind that zoning could change within the time period you are waiting to build. And, as others have suggested, check with the the HOA (if there is one) to see what sort of covenants and restrictions they might have. Am assuming that an HOA does not have limitations on how long a lot can remain empty but would check with them for that also.

I must live somewhere totally different from ya'll. I was assuming the land was out in the country, not a "lot" in a neighborhood, with HOA, etc.! In the case of it being land (as in acreage), it's the way most people around here buy land. Then they build closer to retirement or wanting the lifestyle change living in the country brings.

If you don't buy that now, since the lot is way bigger than most - you might regret it. Someone else will definitely buy that large lot.