A bit of background:
We bought our current house from a couple (she a real estate agent, he a contractor) who had had fixed to flip it. The lot size when they bought was about a 1/4 acre. They severed the back half of the lot and had always planned to build their retirement home on it. (Or that was the story, anyway). The lot is unserviced (we're in a small city) and it was apparently quite a fight for them to get the severance. We've been here 5 years now and have enjoyed not having a back neighbor - we call the empty lot "the meadow" and use it for badminton games and general frolicking.
I received a call yesterday from the lot owners. They have decided not to build on it, and have offered the lot to us. I'm having trouble deciding to buy it.
Pros:
- our neighborhood is older and made up of 1/4 acre lots, except for ours. Buying would put this property back on par with the neighborhood. We would, however, maintain the severance, as it would a) keep the taxes lower; b) give us some price leverage when we decided to sell
- if we decided to sell the house, we would have the option of keeping the lot as a future "investment"; i.e. we could sell it at another time in the future. Or we could develop it and sell the package
-due to the nature of our location (walkable {just barely} to downtown, and in an upscale area) it appears, on the face of it, that there would be nothing but upside to purchasing the lot
- owning the lot would block any potential future builds while we live here. The set-backs are such that any home being built on the lot would be quite close to our current (almost non-existent) backyard. We would definitely lose our privacy if/when a home is built there.
Cons:
-extra ongoing expenses. I am (hopefully) RE next month and had not planned for an extra 800-1000 in property taxes. It could be done for a time, but I have my doubts as to indefinite sustainability.
- water and sewer lines do not run past the lot. To get services to it would cost (at this time) 65k, plus a 2-year 75k bond. While I don't think that the price they're wanting plus the 65k to service would make the lot terrifically overpriced, it would be a close call. Our neighborhood has seen a great deal of redevelopment since we've been here. People have been paying around 300k to buy older homes and either tear them down and rebuild, or change/add on massively.
- with Canadian real estate appearing to be about to take a giant dive, I'm nervous to buy more. This is especially true given that the price of the lot may well be topped out right now, and potentially unrecoverable...at least for many years.
- I have a worry that owning another chunk of land might serve to tether us further to our current city. We have great pipe dreams about living an expat lifestyle for a few years, while my mother's health (she's 71) is still reasonable.
I'm having trouble rationalizing the purchase, but I'm also having trouble rationalizing passing on it. I don't want to miss out on an opportunity, but I have a fear that purchasing would be speculating, not investing.
Also, and not to be too "Shirley MacLaine" about it, the timing seems so serendipitous (I'm potentially getting a chunk of change to RE by selling my business right when being offered the lot) that it's kind of spooky and seems like a "fated" thing. Would it be wrong to go against fate?
Anyway, if anyone can help me to put some perspective on this, I'd greatly appreciate it.