“We need to make sure we're properly preparing our clients for these balloon loans and variable rate increases,” DePaolo added. While the upfront cost of land is comparable or less than a typical home purchase, construction costs can increase significantly. Additionally, some clients may be able to buy land but not build, so they need to have careful discussions about their long-term goals.
“What are their long-term goals? Even if they are able to purchase the land, can they build on it later?” DePaolo asked. “Consider the well, electric, septic system and whether those things are already on the land itself. If not, that could get very costly.”
Due diligence is key
In an interview with MPA, DePaolo recounted cases where unforeseen challenges forced her clients to go off-grid or adopt alternative water systems, emphasizing the need for thorough due diligence. And when asked whether she works primarily with single parcels of land for individual homeowners or larger parcels for developers, DePaolo clarified that, in fact, she works with both.
“My team and I focus on multifamily housing on a single parcel of land or across multiple parcels of land,” she said, “Some people who are looking for land want to build a house first and then a commercial restaurant down the line. So we give people a variety of options and I've worked with them all.”
With a broad perspective on the diverse real estate market, DePaolo notes that renter needs vary by region.