Pros and Cons of Buying Land in New York

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Pros and Cons of Buying Land in New York
By

Bart Waldon

New York is a diverse state with bustling cities, quaint small towns, rolling farmlands, and majestic natural landscapes. For many, owning a piece of property in New York represents the American dream. However, buying land in New York, as with any real estate purchase, requires careful consideration of the pros and cons.

Overview of New York State

New York stretches from the Atlantic Ocean to the Great Lakes, encompassing 54,555 square miles. The state has a population of around 20 million people. Roughly 43% of New Yorkers live in New York City's five boroughs of Manhattan, Brooklyn, Queens, The Bronx, and Staten Island. The rest are spread out among cities like Buffalo, Rochester, Syracuse, Albany and smaller towns.

Outside of the major metropolitan hubs, New York has vast rural areas with forests, lakes, rivers and mountains. The Adirondack Mountains in upstate New York cover over 6 million acres. The Catskill Mountains and Finger Lakes regions are also popular recreation and tourism destinations.

New York has a diverse economy with strengths in finance, media, manufacturing, tech and agriculture. The median household income is around $68,486, higher than the national average. Real estate values also tend to be higher, especially downstate near New York City where demand drives up prices for land and homes.

Pros of Buying Land in New York

There are many potential benefits to purchasing land in the Empire State:

Investment Opportunity

Land can appreciate in value over time, especially in developing areas. Properties near expanding cities and towns may offer strong return on investment. Even rural land can gain value if nearby infrastructure improvements increase accessibility.

Build a Home

Owning vacant land gives you the opportunity to build a customized home without being constrained by existing structures. You can choose the location, layout, materials and fittings.

Farming

New York has rich agricultural land, especially upstate. Farming property provides space to grow crops and raise livestock while living a rural lifestyle. Proximity to NYC and other major cities offers access to large markets too.

Recreation

Parcels with access to lakes, rivers, hiking trails and other recreational features allow you to have your own personal playground. You can camp, fish, hunt, ride ATVs or just have a scenic spot to relax on weekends.

Land Flipping

Some investors buy discounted land then resell it later for profit. With the right property, it may be possible to flip your vacant land for gains in a short timeframe.

Commercial Use

Land suitable for retail stores, offices, hospitality or other ventures has income potential if developed properly. The site could also be leased out to commercial tenants.

Cons of Buying Land in New York

However, there are also drawbacks to be aware of when looking at land for sale in New York:

High Upfront Costs

Property in New York tends to sell at a premium. Budget for a large down payment and closing costs. Banks may require 25-30% down for a land loan too.

Development Restrictions

Zoning regulations may limit what you can build. Some areas prohibit commercial projects. Study the local codes before purchasing.

Maintenance Costs

Even raw land requires maintenance like clearing brush, grading access roads and paying property taxes. These costs add up yearly.

Illiquid Asset

Unlike stocks or bonds, land can take longer to sell, tying up your capital. Marketing and negotiations add time to the sales process.

Litigation Risks

Buyers may inherit liens, title issues or other legal problems from previous owners if due diligence is not thorough before closing.

Local Opposition

Neighbors, environmental groups or officials may oppose development plans, resulting in project delays, costs and headaches.

Changing Market Conditions

Land values can fluctuate significantly in different economic environments. Recessions may hamper sales. Supply/demand imbalances also impact prices.

Natural Disasters

Floods, wildfires, storms and other catastrophic events could damage land improvements or hinder access to remote parcels. Insurance helps manage risk.

Key Factors to Research Before Buying Land in New York

Performing detailed due diligence is crucial when evaluating land for purchase in New York:

  • Permitting - Determine what types of projects are allowed under current zoning restrictions. Make sure there is a viable path to obtain permits and approvals for your intended use.
  • Access - Confirm there is adequate legal access to the site. Review easement agreements if access crosses other properties. Assess accessibility for development equipment too.
  • Utilities - Check on extending public water, sewer, electric and any other necessary utilities to the boundaries. Obtain official capacity letters from providers.
  • Drainage - Poor drainage can add substantial costs and delays. Have a civil engineer assess stormwater management needs.
  • Environmental - Do Phase 1 testing for possible contamination from past land use. Perform wetland and habitat studies as well to identify protected areas.
  • Title - Perform a title search to uncover liens, encumbrances or other claims against the property that could cloud ownership.
  • Taxes - Ask the assessor for estimates of future property tax liability after development. Consider special assessments too.
  • Local Sentiment - Talk to local officials and community groups to gauge whether they will support or oppose your plans. Address concerns early.
  • Market Analysis - Consult recent comparables and an appraiser to estimate property values now and after you complete your intended use. Conservative projections are best.

Performing thorough due diligence takes time but is essential to avoid costly surprises later. Engage land planning professionals like civil engineers, land use attorneys and environmental consultants early in the process.

Is New York Land a Good Investment?

With its diverse geography and strong economy, New York may seem like an attractive state to buy land in. However, there are many variables to consider when determining if vacant land in New York represents a solid investment.

Factors Favoring NY Land Investment

Several factors point towards land in New York having investment potential:

  • Strong population growth downstate and in cities like Buffalo keep real estate demand robust
  • Ongoing infrastructure projects continue to enhance accessibility and development feasibility
  • Foreign buyers view New York real estate as a safe haven for capital, boosting prices
  • New casinos, factories, warehouses and other projects create opportunities for related land uses
  • Constraints on new housing starts push values up for buildable lots as inventory shrinks

Reasons for Caution with NY Land

On the other hand, there are some reasons to be cautious about buying land as an investment in New York:

  • High purchase costs and taxes require larger capital reserves
  • Lengthy permitting processes can hamper development plans
  • Environmental regulations may restrict allowable uses on rural land
  • Legal hurdles like title disputes or easement issues can unexpectedly arise
  • Speculative buying has pushed prices up sharply in some regions

As with any real estate purchase, careful due diligence and conservative financial projections are key to determining if a land investment in New York makes sense. While rewards can be substantial, there are also significant risks to manage.

Final Thoughts

Purchasing land in New York can be a rewarding long-term investment if done cautiously and strategically. The state offers diversity in potential land uses ranging from residential lots to farmland to commercial development. However, New York's high property values also come with higher stakes. Methodical research and planning is key to minimize risks. Partnering with experienced local professionals adds valuable expertise.

While buying land anywhere requires caution, the payoff for patient investors can be lasting enjoyment of a property customized to their lifestyle needs or income goals. With careful evaluation of all pros, cons and important factors, vacant land in New York can potentially offer a sound place to put down roots or expand one's portfolio. As with any major investment, pursuing thorough due diligence before purchase is highly advised.

Frequently Asked Questions (FAQs)

What are the main pros of buying land in NY?

Some of the benefits of buying land in New York include having a spot to build a custom home, privacy, enjoying recreational activities, tapping into appreciation as areas develop, and pursuing commercial opportunities on properly zoned properties.

What are some of the key cons or risks?

Drawbacks may include high purchase costs, development restrictions, illiquidity as an asset, legal issues, local opposition, market fluctuations, and risks of natural disasters. Doing thorough due diligence before purchase is important.

What regions of NY tend to have the most expensive land?

In general, land prices are highest downstate surrounding New York City and Long Island where demand is greatest. Parts of the Hudson Valley and the Finger Lakes can also see elevated values. Upstate rural areas tend to be lower cost.

Can foreigners buy land in New York?

Yes, there are no restrictions on foreign buyers purchasing residential or commercial land in New York. Foreign investors may even find favorable currency exchange rates to acquire U.S. land assets.

Should I use a land broker when looking to buy?

A knowledgeable local land broker can help search for suitable parcels based on your criteria, provide insight on zoning and development matters, assist with negotiations and oversee due diligence. Their expertise and connections can be worthwhile.

About The Author

Bart Waldon

Bart, co-founder of Land Boss with wife Dallas Waldon, boasts over half a decade in real estate. With 100+ successful land transactions nationwide, his expertise and hands-on approach solidify Land Boss as a leading player in land investment.

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