Whether you live in a rural area with lots of land around your own parcel, or an urban center where a lot abutting yours happens to be vacant, the appearance of a “For Sale” sign in front of that land next to yours may intrigue you. Is this an opportunity to enhance the value and appeal of your home? Let's look further into the practical and financial considerations.
Financial considerations aside, having undeveloped open space next to your home is likely to enhance the aesthetic appeal and value of your own property (assuming the lot is not a mine pit or an old dump).
At the same time, you’re buying protection against anything that another buyer of that land might do with it, like building a monstrosity or starting a pig farm. The benefit is hard to quantify, but can be valuable.
If you are living in an area where real estate prices have been increasing steadily and reliably, your purchase of the abutting property may be a sound investment. Moreover, you may be able to purchase the property at a price lower than its market value. And unlike buying a home, you won't have to deal with tenants or upkeep of a structure.
Check online with your town’s assessors department or visit town hall to get the name, address, and telephone number of the owner of the land. Check with real estate information providers like Zillow and with area real estate brokers (not the listing broker!) to get a sense of the market value of the property.
Then you might want to call the owner, introduce yourself, ask about the listing price and whether, as a neighbor, the owner wouldn’t agree to a discount. (You can call the real estate broker listed on the sign, who will get a commission one way or the other, but a personal approach might yield better results.)
If the owner will sell to you at a price substantially less than what you’ve determined is the land's market value, definitely consider buying it.
Would acquiring the abutting property increase the development value of your own property? For example, your property may have enough land for an additional building lot but not enough road frontage for an additional lot. In that case, does the abutting property have enough road frontage so that some of it could be added to your property without reducing the road frontage of the abutting property to less than the minimum required to make it a buildable lot?
You don’t need to create and sell that additional building lot immediately. It’s an investment for the future, perhaps when you decide to downsize and buy a new home.
Creating a new building lot may entail surveying and engineering costs. Get an estimate of those costs from a local surveyor or civil engineer; they should be substantially less than the value of an additional building lot.
Perhaps your own home has enough land, or enough road frontage, so that by acquiring the abutting land, you could create two additional building lots without reducing the acreage or road frontage of your own home below the minimums required in your zoning district.
This would be like buying two building lots for the price of one. As above, talk to a local surveyor or civil engineer about the additional costs involved.
Purchasing land next to yours may secure the aesthetic appeal of your existing home and add to its market value. At the same time, the availability of abutting land that can be combined in imaginative ways with your own creates development opportunities that may make the acquisition of the vacant land profitable.