In today’s episode on Mentorship Monday, Matt answers a the question on “What to do when you want to build Rental Properties on Land that you already own.”
Today’s Question come from Ashley in Texas and Don in New York. Thanks for your questions!
Before you take any kind of action you want to find out what the Land is currently Zoned for. This is know as “As-Of-Right”, which means what you are already allowed to do with the land as it is. The easiest way to find this information is to call your local Zoning Officer. They can give you all the information you need to get started. They’ll let you know if the land is Buildable or not. They’ll also inform you about any special conditions like if it’s “Wet Lands” or anything else that might prohibit you from building on it.
Next, you’ll want to make sure that your can secure Financing. This is the next major part after you figure out what the land is Zoned for. If you can build on the land with proper zoning and you can secure financing than it could potentially be a good deal.
Tip: Try not to go through the Zoning Board. Figure out first the “As-Of-Right Zoning” on the property.
Last but not least be sure that the rents you will be collecting are enough to carry the financing that you’ll have backing you. Even if you decide to live in one of the units yourself, make sure to factor that in as well.
Takeaways: Figure out what the Land is currently Zoned for. “As-Of-Right” Secure financing once you have the proper Zoning in place. Calculate all cost, make sure Rent payments and cash flow will carry financing.
As always, please email us any real estate questions to [email protected] and we will answer them on an upcoming episode!
