Vacant land is one of the best places you can put your money.  But there are a number of things that need to be evaluated before purchasing a parcel of vacant land.

1.  What is the Zoning?

First and foremost, it is vitally important to understand what a property can be used for, and what the highest and best use of the property is.  A simple phone call to the local planning and zoning department can usually give you the answer to this question in a matter of seconds.  Once you know the zoning classification (residential, mixed use, agricultural, etc), ask for some examples of what types of property would be allowed under each of these zoning classifications.  Once you understand the ideal use of the property, you can quickly determine whether it fits your needs.

2.  What is the Topography?

Your first line of business should be understand the topography of the land.  This can have a huge impact on the build-ability of a property.  One of the best ways to do this is by using Google Earth . This free software allows you to search for a property using an address or coordinates and zoom in so you can see precisely where all the hills and valleys are.  Earth Point is a free plug-in for  Google Earth that will allow the topo map to overlay.  This combination of software can give you a crucial perspective on what type of property you're considering. 

3.  What is the Annual Tax Obligation?

If you intent to hold on to a property for any length of time, be sure to check the tax bill relative to the actual value of the property itself.  A reasonable tax bill usually falls in the range of 1$ to 4% of the property's full market value.

4.  What Public Utilities Are Available?

Is utility water available or does it require a well?   Is there sewer at the road or will you have to install a septic?  How close is the nearest electric pole and telephone pole?  Having to install a well and septic will add an average cost of $10,000 to $15,000 to your building cost.  These factors should be taken into account when negotiating.

5.  What Are the Required Setbacks?

The plat or survey of the property should show the required setback lines for building.  If you don't have access to that, then a call to the local zoning department should clarify that for you. 

6.  Does the Property Have Restrictions?

Most of the vacant land you'll encounter will have some kind of zoning requirements and/or usage restrictions in place.  If the property is part of a Home Owner's Association (HOA), it will most likely have even more stringent restrictions in place to help maintain the quality and formality of the neighborhood.  The idea is to keep out bizarre behavior that could inhibit property values, such as junk cars in the yard, unmowed yards, houses not built to code, etc.

Usage restrictions aren't necessarily a bad thing -- they almost always make sense on some level.  But if you aren't aware of these restrictions before you purchase, they can create a conflict with the plans you had in mind.    On the flip side, property with no restrictions (known as unrestricted acreage) usually comes with a premium price because it is so rare to find.

7.  Is the Property in a Flood Zone?

If a property is at risk of flooding you'll want to know this BEFORE you buy because it can be extremely expensive to insure.  Land located near a body of water can be extremely valuable but the close proximity could create other issues.  Be sure to understand the ramifications.

You can check to see if a property is in a flood zone by visiting FEMA.gov.

8.   Does the Land Perk?

If you are planning on building a dwelling of any kind, you will want to make sure the land will "perk".  A perc test (also known as perk test, formally known as Percolation Test) is a soil evaluation that tests the rate at which water drains through the soil.  If a property doesn't have access to a sewer system, a perc test is required to determine whether a septic system can be installed.  Perc tests are usually coordinated with a soil scientist and the county health department.

9.  Is the Property Landlocked?

It's a rare occurrence, but there are parcels that have no road access.  They are surrounded on all sides by other private property, which could deem the land virtually useless.  You cannot legally access the property without going over / through someone else's property.

This issue can be overcome if you can establish a legal, recorded easement to the property.  This can be done if one of the neighbors is willing to allow you access through their property to yours.  They may not agree to do this for free.  You may have to include a monetary incentive to get a right of way.

10.  What Do the Surrounding Properties Look Like?

The properties next door can have some major implications for the value and future "sale-ability" of a parcel of land.  Be sure to get a good idea of what the surrounding properties look like.  Is this a desirable area?  Is it the type of place you would want to live? 

Don't be afraid of buying vacant land!  Just be sure you are informed!