Vacant land on its own probably isn’t going to make you a whole lot of money. However, land does prove to hold lots of potential, especially if you’re looking at developing it. If you’re considering building on your vacant land, here are some the costs you should know about in order to plan a successful budget.
Development Fees
Before you build on the vacant land, you’ll need to make a plan. That typically starts with consulting a builder for a floor plan. If they don’t already have a floor plan you like, you’ll have to work with them to design a custom one, which usually will incur additional fees. Once the floor plan is complete, you or the builder will have to apply for all the necessary permits. The builder should have discussed all anticipated fees and costs of materials with you; however, if changes are made or things are done incorrectly, this may push your project over budget.
If your vacant land in Arizona is in a special mitigation area, there may be additional cost in surveys and protected wildlife studies and permitting. This could range from a few hundred to a few thousand dollars.
Vacant Land Preparation Fees
Once you have a plan and all the necessary studies and permits are completed, the next thing to consider is preparing the land for development. Depending on the condition of the property, you may have clearing and fill costs, which could run anywhere from $5,000 to more than $10,000. Once the land is cleared, you may have waste that needs to be removed. Also, the land might possibly need to be filled and graded. All of these steps will require funding.
Impact Fees
In addition to the possible mitigation fees, there are usually impact fees associated with building. This fee is usually separate from any fees you would pay the developer or builder. Impact fees help the municipality pay for the infrastructure required to support your building or development. The average impact fee runs about $12,000 as noted in a 2010 study, but depending on the area, your building, and a few other factors, the cost could be higher or lower.
Utility Fees
If you’re planning to use city utilities to power your new development, you’ll need to add those costs into your budget. Depending on how far away your vacant land is from the nearest utility line hookup, you will have to pay to extend the utility lines to the property. This may cost anywhere from $25 to $100 or more per foot. The average width of a building lot is about 80 feet, so if your property is in the middle of the block, this could be extremely expensive. Also keep in mind that line extension costs usually do not include the hookup fee which connects the building to the utility line extension.
Well and Septic Fees
If you do not have water and sewer lines in the area, that means you will have to set up a well and septic system. The well will have to be drilled in the correct place to leave enough room for the septic system. The septic system will need to have studies done to make sure the flow is far enough away from the building, the well, and also other surrounding properties. The installer will also have to develop plans and install the system. Again, these are all costs that should be built into your development budget.
Before you buy vacant land in Arizona, make sure you research all of the fees that come with building any kind of structure. But, if done right, your rough vacant land could become a little more shiny.