What a seller's annual carrying cost list on a vacant parcel actually includes

Question

A seller on a 12 acre land listing sharing his annual carrying costs is a useful window into what holding raw land really involves. A typical list includes property taxes, a vacant land liability policy, a couple of mowings, and sometimes a subscription to a parcel data service for tracking county sales. The insurance line is the one that surprises people, since there's no building on the parcel. A vacant land liability policy generally covers third party injury on the property, which matters more than it sounds for anyone with public access or a trail crossing the land, and plenty of experienced land holders carry it as a matter of course rather than being unusually cautious. On the data subscription, plenty of counties publish sales and assessment data for free, and a paid service is really paying for aggregation and alerts rather than access to something otherwise unavailable. Worth checking what the local county assessor already provides before paying for a subscription.

Rena Guide · Accepted Answer

A vacant land liability policy covers claims from someone getting hurt or causing harm on your land. A trespasser on a dirt bike, a tree on your side of the line falling onto a neighbor's fence, a hunter who lets himself in. You own the ground, so a claim can come to you even with nothing built on it. These policies are usually inexpensive, often a few hundred dollars a year for acreage, and many carriers will add the land to an existing homeowners or umbrella policy as an endorsement instead of writing something standalone. Availability and what's excluded vary by state and by carrier, so ask your agent to quote both ways.

On licensing: buying and holding land for yourself needs no license anywhere. Marketing or selling land on someone else's behalf is what triggers licensing rules, and those rules differ by state.

For data, county GIS and the assessor's parcel search are free almost everywhere and will give you ownership, assessed value, acreage, and usually a zoning layer. Paid parcel and sales platforms generally run somewhere around $50 to $150 a month for a single-user plan, and their value is mostly in comparing across county lines quickly. In roughly a dozen states sale prices aren't public at all, so check whether the subscription can actually show you prices where you're buying before you pay for it.

The line that dwarfs all of these is property taxes, and unlike the others it tends to climb as development approaches.

aaron_fitz10 · Answer

The dirt bike concern is a real one on vacant land. Plenty of fields carry a homemade no trespassing sign and get ridden through anyway, which is exactly the exposure a vacant land liability policy is priced to cover.

priya_n21 · Answer

So the full annual bill on 12 acres might come to a tax bill plus a few hundred of insurance plus a couple hundred for mowing. Under two thousand a year in a lot of places, which is less painful than most people assume going in.

stephen_ok9 · Answer

@priya_n21 the annual bill isn't where the cost is. On a $120k parcel the foregone return on the $120k is many times the mowing. People fixate on the small visible line items.

ehernandez74 · Answer

Worth asking that seller for the actual tax statements for the last five years rather than a summary. The trend line shows whether the county has already started revaluing toward development, which is more useful than the current number alone.

raj_mehta14 · Answer

Does a liability policy on land do anything about environmental issues? Old dumping, a buried tank from a farmstead that used to sit there. That seems like a bigger exposure than a dirt bike.

brandonlee36 · Answer

@raj_mehta14 generally no, pollution is excluded from standard liability forms, and that's why a Phase I environmental site assessment gets ordered on parcels with any industrial or agricultural history. Quotes for one on modest acreage tend to run around $2,000 to $3,500. Worth it if there was ever a barn with a fuel tank.

nicole_adeyemi · Answer

On the free side, don't skip the planning department's long range future land use map. It's usually a PDF on the county website and it shows what the county expects that ground to become. No paid subscription reproduces it well.

karen_whitfield · Answer

I pay for nothing but the tax bill and a policy. The county site and a phone call to the planner cover the rest. Data subscriptions are for people buying volume, and land banking done properly is a handful of parcels over a very long time.

What a seller's annual carrying cost list on a vacant parcel actually includes

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