If you are an investor, finding a prime piece of real estate for development is certainly an exciting prospect. You are likely eager to get all the necessary inspections out of the way and make a deal as soon as possible so that you can start developing and making a profit. Even property that seems like a fantastic value can come with some unsavory expenses, though.
There are countless hidden costs, in fact, associated with buying and developing a piece of land. Sometimes these costs arise from legal complications, and in such cases, you should consult with an attorney to better understand the situation. Sometimes, however, routine expenses such as the following can skyrocket the cost of your project:
Clearing out the land: Costs for clearing out land will vary widely based on what kind of land you are dealing with and how forested it is. According to HomeAdvisor, though, the average construction side clearance costs between $1,250 and $4,200. With a window that big, it is hard to predict exactly what you will spend, and the expense may be even higher if your property is several acres or more.
Facilitating utilities: After you have cleared and prepared the land for construction, you will likely have to make way for the installation of utilities. Many utility providers charge per meter to run water or power to a construction site. Whether the land already has utilities installed or needs them to be routed from the local provider, you might find that this is a surprisingly expensive endeavor.
Ensuring compliance: An important yet commonly overlooked factor in land development is ensuring that all your progress is in compliance with local, state and federal mandates. The city you are developing in likely has a host of standards that developers must adhere to, and any violation can quickly become an expensive legal situation. Ensure you are compliant before you begin development.