6 Hidden Expenses of Owning Vacant Land In Orange County

Vacant land can be a truly rewarding investment. Vacant land can also have hidden expenses; they might show up right away, maybe in the long run. There are annual taxes and potentially property owner’s association fees to consider, not as many tax benefits, cash flow and property maintenance issues, and market conditions to consider. Call H&M Realty Group at 949-625-4533 to discuss the hidden expenses of owning vacant land in Orange County.

Annual Cost

Purchasing vacant land might not be as expensive as buying a house, but don’t forget about the annual taxes! Depending on the location and zoning of your land, the taxes might be a few hundred dollars or a few thousand dollars. If you hold onto your vacant land and don’t do anything with it, you might end up paying double or triple what you did for the land in annual taxes and have nothing to show for it but the same piece of vacant land. 

Owner’s Association Fees

Another potential expense is the property owner’s association fees. If you purchased land in a community with an association, these fees might also be a few hundred or a few thousand dollars a year, depending on the type of community, the services they provide and what amenities are available. Also, keep in mind that there might be public utility expansion or other special municipal projects that could be added to your annual tax bill that may or may not improve your land directly.

Tax Benefits

Owning vacant land in Orange County is a nice investment asset, but it has fewer tax benefits than owning a single-family home or a commercial property. There is no depreciation to claim on your taxes, and vacant land does not usually qualify for any type of homestead exemption on your tax assessment.

Cash Flow

Another hidden cost of owning vacant land is a negative cash flow. You do not have a structure to rent out and collect monthly payments. Depending on the zoning of your vacant land, you might be able to recoup some of those annual tax fees by using your vacant lot as an extra rental space. You might want to consider purchasing property owners insurance if you do anything like this. If something happens to someone on your property while moving or occupying your vacant land, they might file a lawsuit against you. That would be a huge cost for you.

Property Maintenance

Owning vacant land can also become costly to maintain. If your property is in a municipality with code ordinances, they may require you to keep your property mowed. If you have a lot of trees, they may require you to clean up the underbrush to guard against fires. If your vacant land isn’t in the best of areas, some dumping might occur on the property that would turn it into a miniature landfill! This dumping ground might cause you to have code violations and can be costly to have it removed. There may also be unknown contaminants or toxic issues on this land that you are unaware of, but once discovered, this might also be costly to clean up.

Market Conditions

Owning vacant land for too long is a big mistake. If you buy your property while the market value is high and hold onto it for a long time, the value might decrease more than you expect. Depending on your purchase price, it might cost even more than your annual taxes to hold onto it year after year. You could be losing hundreds of dollars of market value. 

No matter what your situation, if you own land in Orange County, CA, call H&M Realty Group at 949-625-4533 or send us a message to discuss the hidden expenses of owning vacant land and what you can do about it. 

Joe

Broker/Realtor/Investor/Mentor (41 years experience) Specialties: Buyer's Agent, Listing Agent, Foreclosure, Short-Sale, Property Management, Landlord I'm a Full Time Real Estate Professional, house flipper and mentor to many of my clients. I am here to help you get top dollar for your home or get you the best price for a home that you are going to live in. I have over 40 years of real estate experience for you to draw on and actively list and sell over 20 homes a year. I have sold over 600+ homes in the last ten years alone. I am a very skillful negotiator and will work diligently to help you realize the best possible price when buying or selling your home. With my Exclusive Home Acquisition & Sales System, I can find the Right Home for You! I have access to homes no other Realtor will show you. I can show you how to save an average of $10,000.00 on the purchase price. We will find a home that fits your needs, in a neighborhood that suits your style. If you are selling your home then I can bring all the professionals to you. I always include professional photos in ALL my listings. I have contractors standing by to assist with those upgrades if needed. I can also quickly get you ALL CASH offers for your home if you desire. My marketing surpasses all other agents. It begins with extensive internet advertising to hundreds of websites throughout the world. I do direct mail marketing for you home and also knock on doors in your neighborhood when I am holding an open house. I hold you home open to expose it to as many buyers as possible. My Exclusive program is designed to sell your home for Top Dollar in Any market. I am an experienced flipper here in Orange County and therefore can offer you my over 40 years of real estate experience. The information is available to you at no charge! If you like what you see, please call me and setup Your Free Consultation.

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