Avoid landing yourself in trouble

Buying bare land seems a lot easier than a home. But there are tricks for young players to be aware of. If you buy the wrong section it could be costly. Buy the right one and you might live there happily ever after.

Sections may be within an older neighbourhood, cross-leased off the back of another property, in a new subdivision or out in the country. Each has its own idiosyncrasies.

Whatever option you choose you need to consider the amenities. Are there schools, shops nearby and how close is the public transport?, says Century 21 national manager Geoff Barnett. Will you have to drive to a park and ride and will there be sufficient parking when you get there?

The next big question is the aspect. New subdivisions in particular always look like perfect suburbia in the making. But is your section north facing, south facing, steep, flat, up a difficult driveway and so on? This will all affect the building costs and how easy it is to re-sell in the future.

If the site is inaccessible the cost of earthworks and foundations could be eye-wateringly expensive.

On the building front it's essential to find out if services such as water, sewage, power, phone and gas are connected to the site or if you have to pay for them. Tradespeople such as drainlayers are in short supply in Auckland at the moment and can more or less name their price.

If you're buying a section in an older area you need to ask questions about why it has never been built on. Is it subject to flooding, erosion, subsidence, or covenants/easements on the certificate of title?

These could affect your ability to get building and resource consents, force you to build with certain materials or style, or could make insurance more expensive. Watch for sewer lines, water pipes or easements for these that could hinder you from developing it in the way you want.

Even an easement with the right to run a water pipe could be problematic.

There could even be a paper road that can affect where you build on the land or even a mature pohutukawa tree smack bang in the middle of the section that can't be chopped down.

The site could also be sacred to local Iwi.

If there are issues with the site, engineering and other reports by professionals can cost tens of thousands of dollars.

Barnett says it's also important to consider fencing covenants, which may affect your security and ability to enclose the front garden on a new subdivision.

And on the positive side, are there covenants ensuring that the build quality of neighbouring properties is up to a certain standard? This will protect your investment.

Developers make it sound all too easy to buy sections. But it's really essential to do all your homework, get a Land Information Memorandum (LIM), read the council file and make sure that you engage a lawyer to check all the paperwork before signing on the dotted line.