The 10 Mistakes Made
By First Time Mountain
Jimmy Jenkins, BROKER, e-Pro, ABR, REALTOR
Georgia Mountain Properties, LLC
Copyright 1999 Jimmy Jenkins
All Rights Reserved
"I should know, I've made everyone of these
mistakes so you don't have to!"
Buying a mountain vacation or retirement home is the ultimate get-away. It's easy to be swayed by the beauty of mountain land forgetting that the amenities you take for granted in the city are not granted without cost in the mountains. Make your purchase of mountain property more than a quiet get-away; make it an investment that grows in value while you enjoy its peaceful benefits.
The following ten most common buyer mistakes are important. Some may seem obvious to you while some others will make you appreciate the thought you must give them. Evaluate each of these ten items when you are considering any undeveloped land and, in so doing, you will have calculated a true value for your mountain property and eliminated a potentially nasty surprise later.
Too Steep to Build--too Expensive to Buy!
Be careful of steep grade property. Sure it looks beautiful and it's nice to think of having your home at the top, but most steep grade property cannot be built on without extensive and expensive roads, site work, and building costs accruing. The price may be low and that is why this bargain may well end up costing you dearly to build on or difficult to sell later. If you are unsure about a particular property, contact a builder experienced in the area. Ask the builder to refer you to a good grading and road contractor. Get a good estimate of building costs, site preparation, and road construction costs, then consider if you have a bargain before you buy the land.
Acre Cost Averaging.
$180,000 for 10 acres or maybe $100,000 for 20 acres. A bargain? Maybe not because the most important factor in land value is usable and buildable land when the time comes to sell the land. Remember resale because you severely limit your potential market when much of your property is unbuildable for a number of different reasons. The land that is too steep, too wet, too rocky, too high or too low must be drastically reduced in value. This condition makes the cost of the usable land high and not such a good bargain. Try to negotiate a purchase that includes only the best part of the property, and don't tell the seller why you only want this part; it simply is only your business. The seller may not even think of the difference in value between the two pieces of property, and if the price is reasonable, then you may have a real bargain.
Well Water and Well Costs.
If you buy mountain property that does not have an existing well, then expect to pay $4500.00 + for a good deep well and all the associated mechanical equipment to pump, deliver, and store the water for use. Little thought is given to this important factor. What are the chances of a good water source in the area near to the home site? Then there are septic tank and septic field line locations. You want your well to be uphill and a good distance from the field lines. A good distance in my mind is farther than the minimum required by building codes. You simply don't want to have to consider a well contamination possibility. One of the best and least costly ways to handle this problem is to buy property with a good existing well system and save the thousands you'll spend building one.
Once again you must consider the costs to access your property. Roads are expensive to build. Where do you think you will build your home and what road building costs will you have? Is the property landlocked or surrounded by other property not owned by you? You can legally gain access to your property across another person's property but maybe not exactly in the area you most desire. What is reasonable to you may not be reasonable to the other property owner, and the potential of legal action may add significant time and costs to your place in the mountains. Don't be fooled by land costs alone. You could very well end up spending more to access your bargain property than you paid for the property. If you only buy property that already has good access, then you avoid the hassles and costs of gaining access after the purchase.
Septic Tank Placement and Costs
If the property does not have an existing home and septic system, you must carefully consider the costs and placement of this very important system. Septic tank regulations (and they are strictly enforced) in the mountains are strict because of the streams and wells that are prevalent in the mountains. Where is your well going to be located? Where are you going to place your field lines? Where do you think you will drill for your well? How rocky is the chosen septic system area just under the surface? What if it is solid rock? What other site choices are there? Call the local building inspector or health department for local regulations. You may find that your perfect home site is unsuitable for a septic system or too costly to build because of the number of large rocks just under the surface. This is one area where professional advice is really needed. Make a mistake here and you'll really pay!
Streams, Rivers and Ponds
River, streams and creeks on the property are becomming increasingly difficult to find and a much desired characteristic of mountain property.
Streams are a must for real property value in the mountains. A good stream and/or pond will greatly enhance the overall enjoyment and resale value of any mountain land. The property has added value if there is a good pond site along with a good flowing stream. Be sure to verify the flow of the stream during all times of the year by checking with the other owners of property that your stream also runs through. If there is a pond on the property, check how the water is supplied to the pond, and how the overflow is returned to the stream. Closely determine in what condition the dam appears to be. Do the inflow and outflow systems work? Are they in good condition? How long have they been in place? The longer they have been in place and working, the more you can rely on them. Repairs to dams or inflow and outflow systems are expensive. With the choices available to you, you should always choose property with flowing water. When it comes time to sell the property, flowing water will greatly enhance the property's sales attractiveness. REMEMBER, our analysis is always from the investment side even if your initial stated purpose for the property is something else.
Power, Telephone and Utility Costs
Many times in undeveloped mountain property there is no near by power or telephone access. Check with the local power and telephone companies for costs to provide these services. Don't be shocked because you failed to consider these costs before you purchased the property. With steadily increasing service areas you may find that a cell phone may be the best choice for telephone service. Check closely how dependable and the extent of coverage each of the different cell phone operators provide in your mountain area of interest.
High Quality Insulating Materials.
Don't be penny wise and pound-foolish when choosing insulating materials for the walls and roof. Also carefully choose windows and doors. The mountains are cold and windy in the winter. The cost to install the best available insulated building materials is actually inexpensive when compared to paying utility bills to heat a poorly insulated mountain home. Make sure, by checking the installation of insulating materials, your contractor is doing exactly what you specified. After the insulation is covered up, you'll never know. If you buy a home in the mountains, insist on a fireplace or if the home does not have a fireplace, obtain a good estimate to add a good fireplace and add that figure to your real cost for the property. Remember the cost to install a fireplace later is significantly higher that at the time of construction. The resale value of a mountain home with a fireplace is significantly higher than a home without a fireplace. Test the fireplace even if it's warm outside. Better to find out now that the fireplace doesn't draft well, then after you purchase the home and the previous owner is off to Hawaii.
Mountain Protection Act.
The Mountain Protection Act is intended to protect and preserve the aesthetic beauty of mountain areas. It is intended to prevent destructive development of mountain areas. Just because you own the mountain does not mean you can do to it as you wish. The act is complicated and, as such, professional advice from attorneys and professional surveyors is needed. If the property you want to buy is on the steep side of a mountain, borders national forests, borders state or federal parks, or wilderness or other protected areas, then it is best to seek professional opinions before purchasing the property if road building, developing, or home building is desired. Just because the mountain has an existing rough road already cut does not mean it is necessarily legal. The road could very well not be grandfathered in and, therefore, illegal.
Personal Title Insurance.
Most people don't understand the need for title insurance. At a closing the lender will insist that its loan be protected by title insurance. If a claim is later asserted and found to be valid, then your remaining mortgage debt is paid to your lender by the title insurance company, and your debt is paid in full. But unless you also own a title insurance policy protecting you, then you will lose all your equity, which includes your down payment, all additional equity you have built up through monthly payments, all the value of property improvements, and the value of general property appreciation throughout the years.
Most mountain land has been transferred infrequently. In recent history, without a great deal of care, it may be that a distant previous owner, a relative of this owner, or anyone related to this owner may claim that they have an interest in the property and that the property was transferred without their knowledge and that they are either the rightful owner or they have a share interest in the property. If their claim is found to be valid, then you may lose the property, but the insurance company will pay you up to the limits of your policy. A personal title insurance policy protects you. It is inexpensive and a must for all mountain property owners.
Look for property that already has good access, preferably bordering a good county maintained road. To save real money look for an existing home with a good well system, a nice mountain stream, and either an existing pond or an area where you might build a pond. Look to the future and ask yourself what the potential for resale might be. The future resale value of most mountain property, most importantly, requires good building sites throughout the property, a good free flowing stream, and good road frontage.
I help customers and clients evaluate investment properties based on their requirements and
my knowledge of Georgia mountain property. The Northeast Georgia mountains offer extraordinary investment opportunities. I specialize in acquiring Unique Mountain, River and Stream Investment Property. I work in the Georgia North East mountain areas of Union, Towns, Gilmer and Fannin counties. Acreage tracts, estates, mountain retreats, High views, Creeks, Rivers, Unique and/or Secluded valley properties. I'll help you acquire your special mountain property using professional skills and knowledge. Assuring that you are making the best choices for your particular needs and saving you time and money.
This publication is copyright © 1999 by James R. Jenkins. Visitors to this page have permission to use or copy the information contained herein for their personal, non commercial use. As to other commercial use; no part of this publication may be reproduced in any form, either electronic or mechanical duplication of any kind, without the express written permission of the author, James R. Jenkins. The author may be contacted by eMail at the "Mail to" Link below.
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Georgia Mountain Properties, LLC
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