When you buy a house and land package, there is a clear fixed cost component that you need to budget for - but not if you buy land to build on.
To avoid costly mistakes later on, there are a few things that you need to be aware of before you purchase your plot of land.
In this video interview on 2UE Talking Lifestyle, Robert Projeski, the Managing Director of AMO, talks about some of the hidden costs when buying land to build on.
Before you buy land, you should consider the costs of maintenance and connecting essential services, including:
- water
- electricity
- telephone
- sewerage
- gas connection
- fire control
It's essential that you do research and get estimates for the site that you are interested in buying, as each site will vary in cost and fees.
Other costs that you may incur includes building on steep sites. Local councils may require that you submit soil tests and engineering reports before council will give permission to build. If there are large trees and rocks on your land, you may need to factor in the cost of removing them as tree removal is both expensive and will also require council approval.
If you plan to build a granny flat or to subdivide a property for dual occupancy, you will need to check with council for any restrictions.
It's also critical that you check for flooding, particularly if the site is close to a creek or waterway. Not only will flooding cause sever damage to your future home, it will make it very difficult to obtain finance and insurance.