Are you thinking of buying and developing desert land? On the surface it seems like it should be much easier than buying developed land. No renovation or demolition costs removing the previous building; just a fresh blank canvas for your project. In truth though, you’ll need to do a lot of research to verify the land is worth the investment.
Is the land accessible?
Raw rural land often faces accessibility issues and can sometimes end up legally landlocked. This is common in Arizona and basically means that in order to access the land through public roads or connect to public utilities, the owner has to access their neighbor’s land.
In these cases, getting an easement and right of way is required, which means getting authorization from the neighbor and the county clerk. In some cases, legal action could be required if the neighbor refuses to grant an easement.
How will you develop the land?
Every location has different zoning laws. If you have a plan to develop an industrial space but the land you bought is zoned for residencies, you legally won’t be allowed to build. This is why it’s so important to do the research beforehand and avoid these types of situations. Otherwise you could end up stuck with land that you can’t build on. Consult with local city planners and legal advisors to find out the zoning laws in your location.
How close are utilities?
The more isolated from civilization the land, the harder it will be to tap into the power grid and other utilities. Building the infrastructure to connect the development can end up costing a lot more time and money than budgeted for. Speak with city planners and engineers to get an accurate idea of what it will take to connect.
Another important consideration is water. This is the desert after all, and drought is a natural part of it. If the land isn’t near an existing water supply, it’s possible you may have to drill a well. If so, the next step is filing a notice of intent with the ADWR (Arizona Department of Water Resources). The ADWR regulates all groundwater wells in Arizona and you need their authorization to do any well drilling or expansion.
Can the land support the development?
Don’t judge a book by its cover, especially when it comes to vacant desert land. It may look like a great location for development, but desert land often sits on sand and rock unfit for supporting the foundation of a development or for running utilities like electric and sewage. Bring in a land surveyor and get an environmental assessment report to determine the soil quality. These reports expose any contaminants in the soil or groundwater, and use databases to locate any existing utilities or hidden underground industrial storage tanks from previous owners.
Research your market
Arizona is in the midst of an economic boom, with new businesses and developments popping up all around the state. It ranks in the top ten locations for startups, and infrastructure is being built quickly to support all the new manufacturing and technology companies moving in.
How does your development project fit into that? Is it close enough to a town or city to attract interest and demand? For example, building a residential community won’t work well if the land is isolated away from schools and jobs.
Learn the market by researching successful local businesses and consulting with local real estate agencies. This will give a much more accurate sense of if your development project is practical for the area, and if not, what location might be a better fit. If this is your first development project in Arizona, consider contacting APX West. We provide guidance and counseling services to help our clients develop their personal portfolios and get the most out of their investments. Call us today at 928-412-3570.
