A Quick Guide to Purchasing a Lakefront Lot in Ohio
One of the options available to lake home buyers that is often overlooked is the option to purchase a lakefront lot and either use the lot as-is for lake access or to use it to build their dream lake home at. With more than 30 lakes across Ohio there are several areas with lakefront lots still available and with today’s blog we will go over a few important topics regarding lakefront lots including; reasons why to buy them, steps you should take before buying one, and how purchasing a lakefront lot is different than any other type of purchase.
Why You Would Buy a Lakefront Lot
As many buyers will experience, the lakefront market can often be scarce and competitive depending on which lake they are looking to have a lake home at. There are many cases where a buyer will wait an extended period of time waiting for the perfect property to come up they want to purchase, and this can often times put a damper on a buyer’s lake house aspirations. That’s where buying a lakefront lot comes in handy. This allows a buyer to essentially start with a clean slate and be able to build exactly what they want and avoid having to continue waiting for the perfect home to come up on the market. This route allows a lake home owner to have exactly what they want, and with all the custom home building options there is no limit to what they can do. Another reason why buying a lakefront lot is a good idea, is if an individual doesn’t necessarily have to have a lake home, they can still use the lot for water access and can put in a boat lift as well. Purchasing a lakefront lot can also be a wise financial decision as they are often times a good investment. The fact is that waterfront lots are becoming more and more scarce each year, especially at the smaller private lakes, this means that the value of the lots continue to rise as supply becomes more and more limited while the demand remains the same or becomes higher. For example at Apple Valley Lake due to lack of supply and high demand to be at that lake, the value of lots on the main lake is valued over $200,000.00, rising substantially in the past 5 years.
Steps You Should Take Before Buying a Lakefront Lot
Similar to buying a home there are several things you should look into both before you enter into a contract to purchase a lot, and things you should do while in contract. Starting with beforehand you need to make sure that you have the finances available to both buy the lot, AND pay for the construction of a lake home. Oftentimes buyers don’t realize how expensive building a custom lake home can be, especially if you’re wanting an elaborate home with a lot of custom detail and work. Not to mention that as stated above, supply and demand in a lot of areas has driven the price of lakefront lots upwards on a consistent basis. You should meet with a builder first to get a rough idea of cost you will be accruing, as well as what kind of lot you will need to find to build the house you want. This ties into the next part, which is while you are in contract you need to have the lot surveyed and inspected by your builder. Everything is not always as it seems with land, the dimensions of each individual lot are different and depending on setbacks in that community you may be limited to a specific floorplan depending on the lot dimensions, which will become apparent once you have the survey completed. For example in my experience at Candlewood Lake most single lakefront lots are approximately 60 feet wide or less, and combined with 10 foot setbacks on either side that means the house can only be 40 feet wide, so either a double lot is needed or you have to make your house plan fit accordingly, but many lots are less than 60 feet, which can only be seen on a survey. The next thing to do would make sure your builder does an inspection on the lot, including but not limited to soil testing. This will tell you if the lot is buildable or not as some lots have underground streams or are filled with loose fill dirt that can make building harder and more expensive.
How Purchasing a Lakefront Lot is Different
Purchasing a lakefront lot is different in several ways than purchasing other types of land or houses. For instance lakefront lots, compared to non-lakefront lots, have a totally different market value. Other land value is often determined by acreage or by school district, lakefront lots will depend on which lake it is at, and what type of frontage and view it has, similar to lakefront homes. Lakefront lots are generally much more valuable than regular land in other areas of the same approximate size. Financing for lots is also different than residences because it is not the same type of mortgage set up. Often times buyers will put the cost of the loan for the land, and the construction loan together into one loan, putting down a substantial down payment, and with different terms than residential mortgages. These land loans can often times come with stipulations about building a home within a certain time period, some have variable interest rates, and shorter payback time period. Make sure to talk to an experienced lender before making the decision to purchase a lot. That being said often times the best route is to purchase the lot in cash, leaving the bank out of that side of the process, that way you can have as much time and leeway for the building stage as you want.
Purchasing a lakefront lot can be a very different process than most buyers are familiar with, but it can be a very lucrative option for buyers who want a specific lake home or have had a hard time waiting for a home to come up on the lake they want to live at. Make sure to discuss this choice with your lakefront specialist beforehand.
Written By – Justin Shelton “Lakefront Consultant” – The Lake Team