Investing in land is one of the oldest forms of real estate investment. In addition to being a tangible asset that can be viewed, touched and used for recreational activities, this type of investment is usually less expensive than purchasing a developed property and often offers more potential for a high return. There are several considerations to keep in mind before making a land investment, including location, development potential and current market trends.
Unlike other types of property, raw Land investor generally does not need to be maintained or renovated after purchase. This can save investors a significant amount of time and money in the long run. In addition, the ownership of land typically comes with fewer headaches than owning buildings and rental properties, such as dealing with difficult tenants and repairs. Land can also serve as an inflation hedge, with its value tending to rise at about the same rate as the cost of living.
Land investors can earn income from leasing the property for various purposes, such as agricultural uses, cellular towers or retail outlets. Additionally, they can sell the property for commercial or residential development. The property can also be subdivided for sale. Whether they choose to lease or develop the land, the most successful investors are those that carefully evaluate their investment strategy and goals before making a decision. This includes evaluating the area’s proximity to major population centers, ongoing infrastructure projects and the presence of essential amenities, such as schools, parks and malls.
Another way to make money off of a land investment is by purchasing a parcel in an area that has the potential for future growth. This can be accomplished by researching population growth, employment and household income trends. Investors should also consider the local zoning laws, property lines and parking availability. Dotting each i and crossing each t can be tedious, but it is an important part of the land investment process.
Vacant or “raw” land can be a solid investment for those with the resources to manage it. In many cases, a large parcel of land is able to generate an income that exceeds the original purchase price. While there are risks associated with any investment, the rewards can be substantial if the right research is done and the investor understands the local market.
Investing in land is not for everyone. Those that are not accustomed to the maintenance, adherence to regulations and rental management that come with owning property should probably avoid this type of investment. However, it can be an excellent choice for those who want to diversify their portfolios or are seeking a higher return than the current inflation rate. Before deciding to invest in raw land, investors should carefully assess their investment horizon, purpose and financial capacity. They should also consider the long-term value of the asset and how it fits into their overall strategy.