You've made the decision that it's time to build the home of your dreams!

The first step will be finding the right piece of land to build that dream home. This plot of land will literally be the foundation for your home, as well as the beginning step in the process of completing your dream home. We want to help by sharing with you 5 important things to look for when you are purchasing a vacant lot.

1. Know what you’re working with

Unless you have found a parcel that’s already completely cleared, chances are most lots you’ll see are completely covered in overgrown trees and other foliage. The danger with this is you don’t know what kind of terrain is underneath all that. Could there be a hole in the ground you can’t see? Although it may not be as easy, you’ll want to get as good of a look as you can into that lot, which means making your way through trees and brush to get a better sense of the terrain. The last thing you want is a surprise that could threaten your plans to build.

2. Factor in the costs to clear

As mentioned above, many of the lots you’ll see will need to be cleared before you can get started on your plans to build. Depending on the size of the lot and the amount of clearing and grading needing to be done, this can be costly. If you’re particularly interested in a parcel, you may want to obtain an estimate for land clearing before purchasing so you know if it’s a cost you’ll be ready for. If you plan on building right away, this cost will be a reality sooner rather than later. However, if you ‘re planning on holding off for a while before building, you may have time to save up and plan ahead for clearing costs.

3. Is it in a flood zone?

Although being a flood zone will not affect the purchase of vacant land, it will come into play later when you need to build and will require flood insurance. Before purchasing the land, check to see if this is something that could affect you. If so, you may want to look into the cost of flood insurance first before making the decision to purchase and build.

4. An appraisal will be needed

You may think that since there’s no home on the property, your lender will just use the tax assessed value of the land. However, a vacant land loan still involves a purchase which means an appraisal will be required. This means there will be an appraisal fee as well.

5. Is the HELCO SSPP fee paid?

SSPP stands for Special Subdivision Power Provision, which means that HELCO has outlined an area in which a cost-share charge applies for each parcel in that subdivision in order to help cover the costs of power poles and establishing electricity to each parcel in that area. If the owner of the vacant lot decides to participate, they pay that charge at the time. If not, the charge is not assessed  until the owner of the land looks to establish a power connection.

For lots in Hawaiian Paradise Park, this fee can range from $2,000-$3,000 or more. This SSPP fee will be especially prevalent when looking at lots in Puna. When interested in a property, work with your realtor to find out if an SSPP exists and if there are fees needing to be paid for that lot. If so, you may even be able to request to have the amount of the fee decreased from the purchase price of the lot. This is something you would discuss with your realtor to see if that is a viable option.


If you’re looking into your options for financing a vacant land purchase, check out our web page – Vacant Land Loans. To learn more, give us a call at (808) 930-1400 to make an appointment with a loan officer today. We’d love to help you make your dream a reality!


Information on SSPP obtained from:

4 replies to “5 Things to Look for When Purchasing Vacant Land

Bob Tures

I’m looking to purchase 1 to 2 acres for future home this page seems very helpful as I haven’t been to the Big Island, only going by word of mouth “It’s nice, many people on Oahu would like to move there.
I live on the Mainland and have only visited Oahu & Maui.


Posted by: Jesica

Aloha Bob – Thanks for your feedback, we’re glad this blog has been helpful!


Hello I see a 2 acre Property that has 2 Structures on it and the listing says ” No SSPP fee ”
what would that mean ?
I am guessing it could mean that it has not been paid
Or ? that You don’t need to pay it

I am used to straight talk not evasive language if you get my drift Thanks


Posted by: Jesica

Aloha Conrad – that’s a great question! SSPP refers to the “Special Subdivision Power Provision” which refers to the cost to connect power. In this case, “No SSPP fee” should mean that it’s already been paid, or not necessary. For more clarification, we would suggest calling the realtor on the listing who should be able to give you more information. Mahalo!

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