Purchasing Malibu property can be a solid investment, as well as an opportunity to build your idyllic home There are some important aspects, however, to consider before buying land in and around Malibu. Here are a few tips to keep in mind.
Before buying land in Malibu, there are some important aspects to consider. Here are a few tips to help you along the purchasing process.
The Price of Buying Property in Malibu
Malibu is home to many expensive lots of property. Prices increase exponentially when building a home; especially when you fact in the costs for foundations, walls and beams. Due to updated building codes and regulations, properties with prior homes cannot be built on today .
An option when buying land in Malibu is to purchase a parcel that already has a building permit attached to it. These lots tend to start at around $750,000. Properties with building permits attached have an easier time obtaining a construction loan during the time of the purchase.
Permits Required to Build in Malibu
Purchasing your property in Malibu is the first step of the process. A Building Plan Check is also required.
On Raw, undeveloped Malibu property, this process can take up to 18 to 24 months. You will also need to have your architectural plans, feasibility studies, EIR, geology and archaeology reports prepared, which could cost upwards of $200,000.
Getting Financing to Buy Property in Malibu
There are not too many lenders who offer financing for vacant land. If they do, oftentimes they will require a 50 percent down payment on the property. Lenders may also require geotechnical studies and septic systems to be installed. This can make buying Malibu property a challenge because there are few parcels that have septic systems installed.
However, there are a couple of options available to buyers. First, and perhaps the easiest, is to purchase your land with cash. This will give you the freedom to focus on obtaining the permits and designing the plans for your home.
Secondly, buy the property with seller financing. You will be making regular, periodic payments with interest to the seller for several years.
Construction loans are the third and final option. This is especially appealing if you are buying Malibu property that already has an active building permit. As long as you are ready to immediately start construction after the purchase, this can be a good option.