According to conventional wisdom, real estate is a sound investment. Obviously, conventional wisdom does not automatically imply that it is correct. In reality, prospective buyers of real estate should consider a variety of factors. The condition of any buildings, access to the property, and environmental assessments should all be considered in the purchase decision, but there are additional land use planning considerations that will impact the long-term profitability of a real estate investment.
Buyers of both residential and commercial properties should carefully review the property’s current zoning. This will be the main deciding factor for what uses your new investment will be approved for. Zoning limits a property’s overall uses, but it also frequently establishes guidelines for building size and placement. Check the zoning of the nearby properties in addition to the zoning of the property you are considering. It’s possible that the lovely view of an open meadow you can see from your front door right now is already zoned for heavy industrial uses.
There are additional limitations that might govern how you use and develop your property. For instance, there may be limitations on everything from the type of windows that can be installed to whether a wall can be painted for buildings in historic districts or areas with design overlays. Building placement and topographical changes may be prohibited on property that contains wetlands or a floodplain. Real estate investments and property development can be seriously hampered by the presence of endangered species or regions with significant archeological or anthropological significance.
While some problems or restrictions might be impossible to learn about beforehand, for the most part, restrictions are listed and can be researched before buying. Even though it may seem obvious, make sure to visually inspect any property you are thinking about buying because many of these problems can be seen by simply walking around.
Alvarez & Diaz-Silveira LLP is a corporate law firm in Miami, focusing on international and domestic M&A, finance, real estate and corporate immigration. If you or your business needs legal advice, contact an M&A Attorney in Miami for help.