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Buying Land in or Around Kitchener-Waterloo
When talk of real estate comes up, images of condos and houses often flutter through peoples’ minds. But even in the case of home ownership, land is often implicitly part of the picture: Freehold properties are those in which the owner owns not only the house, but also the land on which it stands.
Today, we’ll be discussing not the properties, but the land itself. Specifically, we’ll be discussing the process and prospect of buying land outright: land without any currently standing properties.
As more and more condo developments pop up in Downtown Kitchener and Uptown Waterloo, there are increasingly many attractive opportunities to invest in a condo unit. But although the condominiums will dominate the downtown skylines (and, in many ways, the Kitchener-Waterloo real estate headlines), investors can also find opportunities closer to the ground (indeed, on the ground itself!).
Buying land may sound like more difficulty than it’s worth, and a lot more complicated than simply purchasing a condo unit in a popular area. But while there are more steps involved than investing than a condo, a better way to look at it is that buying land involves a unique set of principles and responsibilities, while also offering a different set of opportunities.
Buying land enables you to develop it however you see fit. It’s more responsibility, but it’s a blank canvas. And depending on the work you’re willing to put in, you can turn it into a very profitable project, or the home of your dreams.
Hopefully by the end of this article, we will have demystified the act and the art of buying land in or around Kitchener-Waterloo, and perhaps you’ll be keen to become a land investor yourself!
What to Look for
In many respects, it can be even more important to have a trained eye (ideally in the form of an accredited Realtor quite familiar with the region) on your side when scouting out land to invest in or buy.
The financial aspect can differ greatly from simply buying a home: for example, whereas a 20% downpayment with the rest covered by a lender is the norm in buying a home or a condo, many lenders will not be willing to cover so large a percentage.
Consequently, purchasing land can require a significantly larger downpayment – a higher percentage of the overall cost borne upfront. Outside of the financial, what are some things to look for? For one thing, location is of the utmost importance.
You’ll want to prioritize different things depending on your end goal (we’ll explore that a little more shortly), but there are several things that everyone buying land should look out for. Does it have access to utilities?
If it doesn’t, how feasible can things like sewage and hydro be installed? How about electricity? Is solar power a possibility? Many homes on rural plots of land use onsite septic systems – if you’re planning to build a home, it’s important to be aware of the land itself, and the feasibility of a septic system.
Other aspects to figure out are school zoning (if pertinent), access to nearby roads, building codes, and how private the property will be.
In addition to a Realtor determining the overall viability of the purchase, employing experts like surveyors to assess the land (including such things as soil tests and property boundaries). Figure out whether the land has a history of flooding, how water drains from the property, and whether or not you’ll need a well.
Ensure that the plot of land you’re paying for is exactly as advertised; over time, property boundaries can blur as neighbouring properties stretch out (whether by accident or design). The overall principle is that you should look into the things you’ll need to know after buying the land, before buying the land.
If you’re committed to purchasing land, and you have a specific plan in mind, ensure it is viable before committing. If you intend to build a home on your land, to live in or to sell, be sure the land can support the home you want to build.
If you intend to use it as farm land, ensure that it is suitable for that purpose (again, soil tests are crucial). In some cases, buying land and simply sitting on it (not literally) for a few years, then reselling it, can net a profit – but you shouldn’t go in expecting this.
Ideally, you should try to see multiple plots of land; if one or more stand out as a good opportunity, spend more time assessing them. Put in your research, and hire a Realtor you trust to be your advocate – both during and after the initial sale process.
Where to Look
Finding land for sale in central, urban areas is not particularly common. For one thing, much of the land in downtown areas has already been purchased and developed. And in the case of Uptown Waterloo, areas of the land itself have some issues in terms of easily supporting building projects.
The heart of Uptown was once a bog, as highlighted by the recent discovery of a 200 year-old ‘corduroy road’ (logs and sand laid snuggly together) used by early settlers to travel. As a slight aside, this just goes to illustrate one of the additional responsibilities when it comes to buying land: you should be aware not just of what the land looks like now, at surface level, but also about the history of the area, and what lies below the surface.
Strolling up King Street in Uptown Waterloo today, with its paved streets and rows of buildings, you’d have no reason to suspect the land was once swampy!
Rural vs. Suburban
This comes down to both personal preference – what your reasons for buying the land are, and what sorts of things you prioritize – and what you’re willing to pay. Rural plots, by virtue of the far greater abundance of available land, will tend to be far larger, and with a much lower price relative to size.
Suburban plots, and those within existing subdivisions, will typically be smaller and with a higher price point. In terms of regional opportunities, you can keep up with the latest postings on WRX Property Group’s dedicated listings pages: Land for Sale in Kitchener; Land for Sale in Waterloo; Land for Sale in Cambridge; Land for Sale in Guelph.
Many of these plots will be in attractive suburban locations.
If you’re looking for a large piece of land in which to get away from the bustling city, of course it’s best to go for a rural plot. You have the opportunity to build the house of your dreams, and often a much larger home than could reasonably fit in a suburban setting.
Rural land also offers fantastic opportunities to cultivate the land itself. If you’ve always dreamed of retiring from your 9-5 job to start up your own farm, a rural plot of land can be the first step.
You can farm simply for your own personal use and enjoyment, or you can pursue it as a career (farms grossing over $7000 in annual income will need to register with Agricorp, though). Registration, however, confers several benefits, including 25% property tax on agricultural land (as opposed to 100% of rural property value).
Buying rural land is enticing for its opportunity to have a large space to call your own, with the ability to enjoy the beauty and serenity of nature, away from the noise of city life.
But farming – whether large or small scale – is worth looking into, as well. Check out this Ministry of Agriculture, Food and Rural Affairs page to learn more (and check out the Programs and Services for Ontario Farmers to see available benefits).
A great many people live in the suburbs, for a variety of reasons. Families tend to like them as they tend to have schools, shops, and restaurants nearby, but they’re less busy (and often less expensive) than the city centre.
Buying land in a suburban area is a great way to partake of the benefits conferred by suburban life, on your own terms.
Buying land can look daunting at the outset, but if you’re willing to commit to the project, it can turn out to be a great deal. If you choose to develop the land, you can potentially resell it at a later date for a healthy profit.
If you choose to live on the land, you can design the perfect home for you – an opportunity not many get to enjoy. If you have any questions at all, please don’t hesitate to contact us.
If you’re looking to buy land, we’d love to join you on that journey; one of our accredited Realtors will be happy to help you buying land in or around Kitchener-Waterloo.
Written by Will Kummer