Would it be smarter to buy land or buy a run down house?

Question

Would it be smarter to buy a piece of land to invest in? Or would it be smarter to buy a run down house and knock down the house for the land?

Answer 1

Neither one sounds smart to me.

First question is WHY?

Answer 2

Personally, I would buy the one with the house on it. There are a couple of reasons:

You know utilities of some sort are already available on the property. Bringing utilities to an undeveloped piece of land costs a fortune!

As far as lenders are concerned, if you can use any portion of the existing house to rebuild, you can probably get a Home Equity loan to do "upgrades". The money will be available to you at all times.

To start from scratch, such as an undeveloped piece of land or if you completely tear down the house, you would more than likely have to get a construction loan. Each phase is inspected by the bank before the funds (draw) for the next phase is released.

If you're only interested in the land, you have to add the costs of tearing down and removing the structure to the purchase price of the land to determine which is the better deal.

Good luck :)

Answer 3

Land purchase- You will need at least 20-50% down just to get the property. Now Property with a run-down house- agree with the gentleman above you already have utilites running into the house which is very easy to get financing for an possibly 100% depending on the current structure of the home. Yet, how much would it cost you to purchase the house, make it liveable and stick a tenant in there to pay the monthly mortgage. Let not kid ourself here all you want is the land so make the home liveable stick a tenant in there and wait for some land developer to come by and purchase it from you later down the road. Brings me to another topic- is the land in area which in the general plan from the local assessor's office. Good luck!

Answer 4

Buy land is always smarter, because you would have to pay to have someone knock down the house and pay for removal. If the land with the house is cheaper, then find out how much it would cost to get rid of the house and then compare it to land in a similar area and size and then decide. If you want to save money you have to do your homework. Good luck

Answer 5

Undeveloped land is high risk depending on location. I would rather purchase a run down house, with all the utilities and infra-structure, in a safe neighborhood and near employment sources than land in the middle of no-where. Developing land and getting building permits could be very expensive--at least in California it is. Take your time and find that special piece of property that's going to make you money. Stay away from high crime, high unemployment areas. Best of luck!

Answer 6

Buy the land. If the run down old house comes with it, that's cool too. But it's the property that's the investment.

Answer 7

That depends on the location of both and current market value of the property you are considering. Further, don't forget the cost of disposing of the existing structure. You may want to entertain the idea of renovating the existing property and renting it.
I would speak to a qualified Realtor in your area and they should be able to help you with your questions.
Good luck and just know that Real Estate is by far one of the best investments you can make.

Answer 8

Land. There may be more complications in knocking down a house (asbestos, dumping permits) than starting from scratch.

Answer 9

Buy a piece of land. There's no way you can lose

Answer 10

Depends on where you are buying at. Some areas in this country are a bad buy no matter what and some are good no matter what.

I sell houses for a living.

Answer 11

land