Why Is Raw Land Cheaper Than An Improved Lot?

By LandCentral

Whether you want to retire in a remote area, or you are just looking for a getaway place far from the noise and lights of the city, you might find yourself wondering what raw land is.  Why is there such a great difference in pricing when comparing an already developed piece of property and one that is completely raw?  While it can be a great investment, there are a number of concerns and considerations to pay special attention to when purchasing raw land. These items can be addressed before, during, and after the process of purchasing your property.

Namely, raw land is a land found in its natural state to which no man-made improvements such as clearing, digging, grading, and cleaning have been done before. What this means is that there is a lack of basic utilities – water, sewer, electricity and telephone lines –which would normally exist on an improved lot.

Furthermore, into the reasons why raw lands cost less, wells can be costly on when you start building.  Wells are priced by the foot of depth where feet can vary in price anywhere from $8 to $30, depending on the type of earth being drilled through. If the land mostly consists of sandy soil, then, the drilling process will be much quicker and will cost less, as to compared to drilling through rock. Also, you can never be sure of the cost entirely until the end, since the total price is greatly determined by its depth.  The depth itself depends on how far the source that can produce an adequate supply of clean, usable water, is. However, generally speaking, wells can range somewhere around 80 feet to 1,000 feet.

In addition to the cost made for the well drilling, there can be additional charges of installing a pump and running water lines to the building which will alone be around $1000-2000. Installing a required casing, a cement slab for the well pump to sit on, and, if desired, a well cover (a well cover can be decorative rocks that complete the landscaping features) are also new expenses to consider.

On the other hand, if the land you intend to buy is within city limits, you will most likely be able to connect it to the city water lines. This will indeed cut costs, but there are “tap fees” or “connection fees” to be considered as these are fees with which the city charges you to give you access to their water. Also, the water company may need to run a line to your new property, costing additional fees.

Something else to consider is the septic system. If you need to build one from scratch, you are looking at $3000 to $15,000.  It could depend on the lot and its condition of the soil, as well as the number of bathrooms in the house.  As a buyer of the raw land, one will want to determine whether the land will support a septic system and where that system will be located once approved. Septic systema are soil sensitive, which means that it is possible to install it only in areas that allow for percolation of liquid effluent into the ground.  The soil may need to be “perc” tested by the county or city in order to get a permit.

Having a well or septic system already installed on a property, or public utilities already hooked up, can greatly increase the cost.  The comparison of undeveloped, or raw, land to a partially developed land could explain why costs vary, especially when you are looking at pricing based on cost per acre.

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