Be Careful When Buying Agricultural Properties

 

Be Careful When Buying Agricultural Properties.

When you are a real estate investor a ton of properties come across your desk every month.  Sometimes some look really great until you dig more into them.  You find out maybe it is too good to be true.  But at the same time if you know what to look for and what to look out for then you can find a good deal out there.  One area of real estate you need to be careful is when you are buying agricultural properties.  I will explain one of our experiences and what we did and wish we did.

Greenhouses

A lot of the time when you run into agricultural land, especially in California the land has greenhouses on it.  That is exactly what happen to us on a property in North County San Diego.  The property itself was great but it was surrounded by hundreds of greenhouses which we thought was okay until we dug more into it.  We found out that the homes around them are devalued due to environmental concerns and ground contamination from all of the pesticides and fertilizers used.  This is a big deterrent when trying to re-sell a home, especially when it’s a big home on  a lot of acreage.

Splitting Lots

The agricultural land we were buying was about 15 acres.  At first glance we thought we could split the lots and sell off a few of them or build another house on one of the other lots.  Unfortunately that wasn’t the case. It is really hard to split lots like these and even if you can it will cost you.  It is a great thing for the area to conserve and protect the land but bad if you bought the land thinking you could split it.

Water, Easements, Flooding

If you buy land that is zoned agricultural then you really need to dig into the water rights.  Is it on a well, municipal water.  Those are big things with buyers.  Some people wont buy a house with a well, all that has to be adjusted for when buying.  Another to watch for is easements.  Last thing you want is your neighbor driving right by your house every time they have to go out.  And lastly is flooding, you’ll need to find out if your property is in a flood zone.  Best way to find that out is to get a Natural Hazard Disclosure(NHD).  If your house is in a flood zone you most likely will have to get flood insurance and it will be harder to sell.

Buying property in California is hard enough.  But when buying property that is zoned Agricultural  do a little more due diligence than normal.

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