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Planning and Zoning: 3 Things to Look for When Purchasing Property

The conventional wisdom is that real property is a solid investment – after all, they aren’t making any more of it, and it’s often billed as “one of a kind.” Of course, just because the wisdom is conventional doesn’t mean it’s correct. In reality, there are a multitude of considerations that potential real property purchasers should take into account, and a careful review of these will generally result in sounder investment decisions. The condition of any buildings, access to the property and environmental assessments all should be factors in the purchase decision, but there are additional issues from a land use planning perspective that will impact whether an investment in real estate will pay off in the long run.

Current zoning

Both residential and commercial purchasers need to carefully examine the current zoning of the potential investment property. This is the primary factor in determining what uses will be deemed acceptable for your new investment.  It also may provide insight into a municipality’s thought process on how property is most efficiently used from a community perspective. Zoning restricts property to specific uses overall, but it also typically sets standards for the size and placement of buildings on the property, whether the storage of boats and RVs is permissible, whether certain animals can be kept on the property and potentially a multitude of other issues.  In addition to the zoning of the property you are considering, be sure to check the zoning of surrounding properties as well.  The beautiful open meadow vista you can see from your front door today may in fact already be zoned for heavy industrial uses.   

Bear in mind that less than ideal zoning is not necessarily a dead end; some desirable uses may be available as conditional uses, which require additional governmental approvals, and  you may attempt to rezone property for your intended use. However, this will likely entail significant additional expense, and favorable outcomes are not guaranteed. 

Overlays and design restrictions

RE development

There are other possible restrictions that could dictate how you can use and develop your property. For instance, buildings in historic districts or areas with design overlays may have restrictions covering the spectrum from the types of windows that may be installed to whether a wall may be painted.  Property with wetlands or floodplain can have restrictions placed on building placement and altering the topography of the land. The existence of endangered species or areas of archeological/anthropological significance can throw a serious wrench into real property investments and property development. While a few issues or restrictions may be impossible to discover in advance, for the most part, restrictions are recorded and available to investigate prior to purchase.  Though it may go without saying, be sure to visually inspect any property you are considering for investment – many of these issues will become evident by simply taking a look around. 

Future planning

Consider all aspects of the property, and surrounding properties, and picture how it may end up in five to ten years’ time. Is the city planning on putting a fire department in the vacant lot next door? What about a highway through the woods behind your back yard? Would those changes help or harm your investment?  Taking even a few minutes to familiarize yourself with the government’s long range plans – all typically publicly available through government planning offices and even just City Hall in many cases  – may provide valuable insight in determining whether purchasing an investment property is a savvy decision.  A commercial property may substantially appreciate in value when a new thoroughfare is proposed nearby; however, this same roadway project may detrimentally impact residential values.   Additionally, partially completed residential developments may evolve in character from what was originally proposed. What is now a vacant adjoining lot and was originally slated for additional single family residences may ultimately evolve into proposals for denser residential development, or even a neighborhood shopping center. It’s important to consider how the neighborhood and/or surrounding area could evolve before making a purchase, and the viability of current future development plans in the area.  Though often these issues are difficult to predict with certainty in advance of a purchase, an area’s Comprehensive Plan may contain valuable clues as to how property may develop in the future.  And Talking to property owners in the area may provide useful clues. Also, once you have purchased a property, be sure to monitor development activities in the area.  Zone changes and conditional use permits typically require notification to adjacent property owners, but you may not be officially informed about a substantial development going in nearby. 

For real insight and evaluation of property before purchasing, however, the assistance of a real estate attorney is invaluable.

Services may be performed by others.

This article does not constitute legal advice.

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