5 Things to Consider Before Buying Land in Colorado

Is Colorado on your investment wishlist?

Colorado is famous for its rocky mountain landscape, adventurous activities, and unique weather. Its diversity makes it one of the top choices for land buyers. Moreover, depending on the area, with average prices ranging between $1,626 and $12,000 per acre, there is a variety of options to choose from.

You could find some of the best options for land for sale in Colorado on Houzeo.

However, owning a piece in this beautiful state requires more than just your interest. Proper research and thoughtful planning are crucial before buying land in Colorado.

Buying Land in Colorado? Five Essentials to Double-Check

Here are the following factors that you should consider before making your land purchase in Colorado:

Location and Accessibility

Colorado is divided into urban areas, mountainous regions, and rural plains.

Urban: Cities like Denver, Colorado Springs, and Boulder are situated along the Front Range and benefit from well-developed infrastructure. This makes them highly accessible with major highways and public services.
Mountainous: The Rocky Mountains dominate the central and western areas. They offer scenic vistas but challenging terrain, particularly in towns like Aspen, Vail, and Telluride. In winter, the roads in these cities can be impassable.
Rural: The Western Slope and Eastern Plains are more rural, with limited access and fewer transportation options.

The state’s structure also includes the flat plains in the east and the rugged terrain of the Colorado Plateau in the west. Comprehending these factors is vital when evaluating land for purchase, as they impact accessibility and potential development expenditures.

2. Zoning and Land Use Regulations

Each Colorado county has its land use code, detailing permitted uses, density, and development standards.

Zoning distributions can vary within the same county, with different allowances between residential, commercial, and agricultural zones. The permitting process also differs by location and proposed use.

Some areas may require environmental reviews or public hearings. Before buying land in Colorado, make sure to take care of these factors:

Urban Areas: Denver has comprehensive zoning codes for residential, commercial, and mixed-use properties with strict building standards. Boulder prioritizes sustainability, with regulations on open space and green building standards.
Mountain Regions: In Summit County, home to ski resorts, zoning supports recreational activities and natural resource protection. At the same time, Eagle County focuses on tourism and environmental preservation.
Rural Areas: Delta County has regulations to protect agricultural lands. And Park County balances development with open space preservation.

Have you checked the zoning regulations in your desired area?

3. Utilities and Infrastructure

When buying land in Colorado, it's important to assess the availability and quality of utilities and infrastructure.

Electricity:

Urban Areas: Cities like Denver and Colorado Springs have the advantage of robust electrical infrastructure. They facilitate multiple providers, ensuring reliable service.
Rural Areas: In more remote regions, such as parts of the Eastern Plains and Western Slope, access to electricity may be limited, and connecting to the grid can be costly.

Water:

Municipal Supply: Urban centers typically have established water systems managed by local utilities.
Rural Supply: In rural areas, water access often depends on wells or local water districts. The Colorado Division of Water Resources offers a Map Viewer to visualize hydrographic data, which can help assess water availability.

Sewer and Wastewater:

Urban Areas: Comprehensive sewer systems are standard in cities.
Rural Areas: Rural properties may rely on septic systems. These systems require regular maintenance and may have limitations based on soil conditions.

Transportation:

Major Highways: Interstates like I-25 and I-70 join key urban centers, facilitating efficient travel.
Rural Roads: In less populated regions, roads may be unpaved or less maintained, potentially affecting accessibility.

Telecommunications:

Urban Areas: High-speed internet and cellular services are widely available.
Rural Areas: Service can be erratic, with some areas lacking reliable coverage.

Note: Before buying land in Colorado, it's advisable to consult local utility providers and county planning departments. This will help understand the specific infrastructure available and any associated costs or limitations.

4. Legal Aspects and Property Title

Understanding the legal aspects and property title is vital to ensure a secure investment.

Property Ownership Types:

Colorado recognizes three primary forms of property ownership:

Sole Ownership: One individual or entity holds entire ownership of the property.
Joint Tenancy: Two or more individuals share equal ownership with rights of survivorship.
Tenancy in Common: Two or more individuals own the property, each with a distinct share, which can be transferred independently.

Transfer Fees:

Colorado law debarred transfer fee covenants on residential real property. This ensures the free transferability and marketability of titles.

Title Standards:

The Colorado Real Estate Title Standards provide guidelines for title examination and conveyancing, ensuring clarity and security in property transactions.

Note: Before buying land in Colorado, it's advisable to consult with a real estate attorney or title company to navigate Colorado's property laws effectively.

5. Cost of Ownership and ROI

When considering land ownership in Colorado, it's essential to evaluate both, the costs involved and the potential return on investment.

Cost of Ownership:

Property Taxes: Colorado's residential property tax rates are relatively low, averaging 0.49% of the property's value.
Insurance: Homeowners in Colorado have experienced significant increases in insurance premiums, with rates rising by 34% from 2018 to 2023.

While neighboring states like New Mexico had an average annual premium of $1,595, Wyoming's average was around $1,885.

Maintenance and Utilities: Regular expenses include maintenance, utilities, and, in some cases, homeowners’ association (HOA) fees. This can range from $200 to $400 per month.

Return on Investment (ROI):

Farmland Investments: Over the last 20 years, Colorado farmland has shown average annual returns of 9.06%.
Real Estate Market: Colorado's real estate market reflects resilience, with appreciated property values over time. However, ROI numbers can vary depending on location, property type, and market conditions.

Plan Smart, Buy Right!

Colorado is a promising state for investing in land, depending on the investor’s goals. The factors mentioned above are a few important aspects to consider before buying land in Colorado. Proceed step by step and start by setting an investment objective. Once the objectives are finalized, look for related things that can make an impact. With the right approach and planning, the ‘Centennial State’ can prove to be the best option.