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Intermediate terms

Essential Land Investing Terms

This curated collection includes key terms that might be helpful when exploring land and raw land investing. It covers specialized concepts related to undeveloped property, focusing on zoning, entitlements, and future use. These terms were selected based on common questions and areas where investors often need clarity.

Learning Path

1

Raw Land

Raw land is undeveloped property that lacks structures, utilities, or other improvements, often purchased for future development or long-term appreciation.

Beginner2-3 min
2

Environmental Impact Study

An Environmental Impact Study (EIS) is a detailed public document mandated by environmental laws (e.g., NEPA, CEQA) that rigorously assesses the potential significant environmental effects of a proposed major project, identifies alternatives, and proposes mitigation measures to inform decision-makers and the public.

Advanced5 min
3

Speculative Land Investing

Speculative land investing involves purchasing undeveloped land with the expectation of profiting from a future increase in its value due to external factors like development or zoning changes, rather than from immediate income.

Intermediate5 min
4

Zoning

Zoning is a set of local government laws that regulate how land can be used, dictating building types, sizes, density, and permitted activities to promote orderly development and protect community welfare.

Intermediate15-18 min
5

Site Plan

A detailed drawing or map illustrating the existing and proposed conditions of a parcel of land, including structures, landscaping, utilities, and access points, essential for real estate development and regulatory approval.

Intermediate2-3 min
6

Percolation Test

A percolation test evaluates the rate at which water drains into the soil, primarily to determine a site's suitability for a septic system. It is a critical due diligence step for real estate investors considering undeveloped land.

Intermediate2-3 min
7

Infrastructure

Infrastructure refers to the fundamental facilities and systems, such as roads, utilities, and public services, that support a community and are crucial for real estate development and property value.

Beginner5 min
8

Land Banking

Land banking is the strategic practice of acquiring large tracts of undeveloped land and holding them for an extended period, anticipating future appreciation in value due to market growth or development potential.

Intermediate5 min
9

Subdivision

Subdivision is the legal process of dividing a single parcel of land into two or more smaller parcels, typically for the purpose of development, sale, or lease. It involves navigating local zoning ordinances, planning regulations, and infrastructure requirements.

Intermediate15-18 min
10

Feasibility Study

A comprehensive assessment of a proposed real estate project or investment to determine its viability, practicality, and potential for success across market, technical, financial, operational, and legal aspects.

Intermediate12-13 min
11

Highest and Best Use

Highest and Best Use refers to the reasonably probable and legal use of a property that is physically possible, financially feasible, and results in the highest value, guiding optimal property utilization and investment decisions.

Intermediate13-14 min
12

Title Search

A title search is a comprehensive examination of public records to confirm a property's legal ownership and identify any claims, liens, or encumbrances against it, ensuring a clear title for real estate transactions.

Intermediate11-12 min
13

Easement

A legal right allowing one party to use or access another's property for a specific, limited purpose, without owning the land. It creates a non-possessory interest that can affect property value and use.

Intermediate15-18 min
14

Plat Map

A plat map is a detailed drawing that divides a parcel of land into lots, blocks, and streets, showing property boundaries, easements, and other features essential for legal property descriptions and development.

Intermediate2-3 min
15

Water Rights

Water rights grant property owners the legal authority to use water from a specific source, such as a river, lake, or underground aquifer, influencing a property's value, utility, and development potential in real estate.

Intermediate4-6 min
16

Entitlements

Entitlements in real estate refer to the legal rights and approvals granted by governmental authorities for a property to be developed or used for a specific purpose, often involving zoning changes, permits, and environmental clearances.

Intermediate13-14 min
17

Wetlands Delineation

Wetlands delineation is the scientific process of identifying and mapping the boundaries of wetlands on a property, crucial for real estate investors to understand regulatory restrictions and development potential.

Intermediate2-3 min
18

Utilities

Essential services like electricity, water, gas, and internet that are necessary for a property to be habitable and functional, impacting a real estate investor's operating expenses and cash flow.

Beginner3 min
19

Topography

Topography refers to the natural and artificial physical features of a land area, including its elevation, slopes, and the presence of natural elements like rivers or hills. It significantly impacts property development, usability, and value.

Beginner3 min
20

Property Survey

A property survey is a detailed map or drawing created by a licensed surveyor, accurately depicting property boundaries, dimensions, and the location of improvements, easements, and other features. It is a critical legal document for understanding and protecting real estate investments.

Intermediate15-18 min
21

Environmental Site Assessment

An Environmental Site Assessment (ESA) is a report identifying potential or existing environmental contamination liabilities on a property, crucial for real estate due diligence and risk management.

Intermediate14-15 min
22

Land Development

Land development is the process of transforming raw, undeveloped land into usable and valuable property by adding infrastructure and preparing it for construction or sale.

Intermediate10-11 min
23

Option to Purchase Land

An Option to Purchase Land is a contractual agreement giving a buyer the exclusive right, but not the obligation, to buy a specific property at a predetermined price within a set period, in exchange for a non-refundable fee.

Intermediate4-5 min
24

Land Due Diligence

Land due diligence is the comprehensive process of investigating a parcel of land to identify potential risks, liabilities, and opportunities before purchase or development, covering legal, environmental, physical, and financial aspects.

Intermediate7-9 min