An empty lot looks like the cheapest thing a person can own, which is why people hold one for twenty years without meaning to. The cost of owning vacant land is quiet rather than large, and it compounds. Taxes arrive every December whether or not anything happened on the parcel, and unimproved ground rarely qualifies for the exemptions a residence does. Municipalities in St. Louis County enforce mowing and nuisance ordinances, so the lot gets cut on someone's schedule and billed to you if you miss it. Liability sits with the owner regardless of who wanders onto it. Any association fees continue on their own calendar. And the largest line is the one that never appears on a statement: money parked in dirt earns nothing while it waits, and there is no depreciation or rental income to offset it the way a building would provide. Add it up and vacant land holding costs commonly run one to three percent of value a year, every year, against an asset that may or may not appreciate faster than that. Here is how holding costs work in detail, and here is who buys land in Missouri. If you would rather be done with the parcel, tell us where it is and what you know about it.
Annual Cost In Crestwood, MO
Purchasing vacant land might not be as expensive as buying a house, but don’t forget about the annual taxes! Depending on the location and zoning of your land, the taxes might be a few hundred dollars or a few thousand dollars. If you hold onto your vacant land and don’t do anything with it, you might end up paying double or triple what you did for the land in annual taxes and have nothing to show for it but the same piece of vacant land.
Another potential annual fee is the property owner’s association fees. If you purchased land in a community with an association, these fees might also be a few hundred or a few thousand dollars a year, depending on the type of community and the services they provide and what amenities are available. Also, keep in mind that there might be public utility expansion or other special municipal projects that could be added to your annual tax bill that may or may not improve your land.
Tax Benefits In Missouri
Owning vacant land is a nice investment asset, but it has fewer tax benefits than owning a single-family home or a commercial property. There is no depreciation to claim on your taxes, and vacant land does not usually qualify for any type of homestead exemption on your tax assessment.
Cash Flow In Crestwood, Missouri
Holding on to vacant land is negative cash flow. You do not have a structure to rent out and collect monthly payments. Depending on the zoning of your vacant land, you might be able to recoup some of those annual tax fees by using your vacant lot as an extra rental space. You might want to consider purchasing the property owner's insurance if you do anything like this. If something happens to someone on your property while moving or occupying your vacant land, they might file a lawsuit against you. That would be a huge cost for you.
MO Property Maintenance
Holding onto vacant land can also become costly to maintain. If your property is in a municipality, they may require you to keep your property mowed. If you have a lot of trees, they may require you to clean up the brush to guard against fires. If your vacant land isn’t in the best of areas, some dumping might occur on the property, turning it into a miniature landfill! This trash and garbage might cause you to have code violations and can be costly to have it removed. There may also be unknown contaminants or toxic issues on this land that you are unaware of, but once discovered, this might also be costly to clean up.
Crestwood Market Conditions
Holding onto vacant land can be a big mistake. If you purchase your property while the market value is high and hold onto it for too long, the value might decrease more than you expect. Depending on your purchase price, it might cost even more than your annual taxes to hold onto it year after year. You might also be losing hundreds of dollars of market value.
Sell My House In Crestwood, MO
As you can see, if you sell your land now as opposed to later can help you keep more money in your pocket. It also applies when you are planning to sell your house in St. Louis, but can't do so because of a few reasons I'm guessing. For every day you continue to own it, you will also continue having to be financially responsible for it. As professional Missouri home buyers, we can help you run the numbers for your property and help you make the decision that makes the most sense for you!
