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The 3 different types of land

Upland Meadows

You may think that dirt is dirt, but in real estate, there are three different types of land.  Each type could impact your investment, building plans and/or financing options.

Which type of lot best suits you will depend on your timeline and overall objective.  Below is a brief breakdown of the different types of vacant land.

Raw Land

Raw land is a vacant lot that has no improvements, such as a structure (e.g. house, storage unit) or utilities (e.g. water, electricity, gas, sewer) nearby.  This type of land is generally less expensive than unimproved or improved land.  If financing with a bank or credit union, you may want to check with the loan officer to learn if they will lend on raw land.  Some property descriptions may say a rural lot has utilities, but it is one of the assumptions that you should never make.

Unimproved Land

Somewhat similar to raw land, unimproved land does not have any structures or utilities on the property.  However, utilities may be in the street a short distance away. This factor can increase the value of vacant land.  With the increased value, a bank or credit union may be more inclined to finance the parcel(s).  Plus, the down payment and interest rate could be less.

Improved Land

Unlike with raw land or unimproved land, improved land can have a range of development and therefore, the highest value.  Development can range from utilities at the line, curbs, paved roads and in some cases, a structure (e.g. house, storage unit).  Improved land is generally ready to developed on with fewer obstacles.  This type of land can be easier to finance with a land loan because the value is higher over raw and unimproved lots.

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