Thinking of Buying Land? Be Sure to Get Answers to These Questions

You could regret your land purchase if you don't know the answers to these questions.

If you're interested in building a home, you need a plot of land. Many builders have land for sale, or you can find a plot on your own.

Before you apply for a mortgage and buy land, though, be aware that there are sometimes considerable restrictions on what you can do with a property -- even if you own it. You don't want to find yourself with a plot you can't use for your intended purpose, so get answers to these five questions first.

1. Are there deed restrictions on what you can build?

Sometimes there are restrictions attached to the deed for a piece of land. Also called "restrictive covenants," deed restrictions limit how you can use the plot.

For example, deed restrictions in my neighborhood mandate that houses be above a certain square footage, and limit construction to just one home per plot of land.If I wanted to build a smaller home or an in-law apartment or rental property, I wouldn't be allowed to.

Sometimes, deed restrictions are even more restrictive. They can specify everything from how tall you can make your fence to the number of vehicles you can store on your property. It's important you understand how these restrictions impact your usage of the property.

2. Is the property on wetlands?

If any part of your property is designated as wetland, you need special permission to build. The process for this depends on your state's rules, as well as on whether the federal government has jurisdiction.

It can be extremely time-consuming and expensive to build on wetlands -- especially if you have to pay wetland impact fees because you're disturbing a substantial area. My husband and I purchased 16 acres in Florida last year, and a small part of our driveway crosses a tiny area of wetlands -- around .36% of an acre. It took over a year and several thousand dollars to secure a permit, and we had to hire an engineer and two environmental consultants.

While wetlands properties can be attractive, be aware of what you're getting into. Your cost and timeline to build may get thrown out the window.

3. What are the zoning rules?

Zoning rules also dictate what you can do with your property. If your area is zoned residential, you can't run a business out of it. But the rules can go beyond specifying whether you can operate a company from your home. They can also control things like property density, building height, the percentage of the lot you can pave, and how far your home must be set back from property lines. Find out what the zoning rules are before you buy to avoid problems.

4. Can you use any builder?

If you are building a home in an established development, you may be restricted to builders on an approved list. We ran into this when shopping for Florida property -- several planned communities would have required us to pick from just three or four approved builders.

If you want to choose your home builder without limitations, or if you plan to act as your own general contractor, make sure you understand whether you're allowed to do that with your chosen plot of land.

5. Is there a time limit for development?

Finally, there may be a requirement that you start construction of your property within a certain time frame. If you're trying to save money to build before you begin, you may find that this poses a problem.

You don't want to be caught off guard by limitations that come with your land. So ask all of these questions before you commit to buying. Be sure you can build the home of your dreams in that perfect spot you've chosen. Otherwise, it may turn out it's not so perfect after all.