When it comes to real estate investment, land is often times the overlooked step-child. There is amazing potential when investing in land that many investors never tap into! Learn more about land investment and strategy in our latest post!
There are many reasons to get into land investment. It can be an excellent way to begin investing or as a way to diversify an already robust portfolio. People from all parts of the country and in all income brackets are turning to land as a stable and limited resource. Is it right for you? Learn more below!
Guide to Land Investment in California
Land is Low Maintenance
Land is one of the low-maintenance assets; you merely have to own it and make sure tax bills are paid. It isn’t much you have to do when owning a piece of land. Maybe some landscaping so weeds don’t get out of control, but otherwise, it basically just sits there. Make sure to be aware if utilities or other expensive assessments will be enforced while you are in ownership of the land. You wouldn’t want to buy a $5,000 lot only to find you will be paying $20,000 (overtime) to have water run to it.
Easy to Get Started
You don’t need to have a ton of experience to get started inland. Do your homework and you should be able to find something for only a few thousand dollars. Learn about the market and see what lots are going for. Are there seasonal trends? What does the future population growth look like? Are there development plans or changes in zoning on the radar? It is ready to be developed or is it raw land with no foreseeable plans nearby?
Why Is It For Sale?
It’s not always easy to understand why a particular piece of land is being offered for sale. There could be a number of reasons, some more obvious than others. In many cases, the reason is quite simple: the owner needs to sell quickly and doesn’t have time to wait for the perfect buyer.
In other cases, there may be something about the property that makes it undesirable. It might be in a bad neighborhood or have environmental problems that make it difficult to build on or use. Whatever the reason, it’s important to know what you’re getting into before you buy land.
What’s Your Strategy?
Flip It – To flip land effectively, you need to buy low and sell high. You can do this by finding unlisted deals or directly contacting the owners of lots that appear to be overgrown and forgotten. The land may have been purchased long ago, and all but forgotten about until it’s time to pay property taxes. By reaching out to owners directly, you will be able to create a relationship and possibly take unwanted real estate off their hands. When contacting any property owner, always be respectful and respect their privacy. If they are not interested in selling, never harass or bother them in hopes of doing so. You should then market the property to retail buyers. People who want to build a home on the site for themselves, etc.
Buy And Hold – Land is an excellent investment to buy and hold. It will typically appreciate over time and is very simple to maintain. Your primary expense will be property taxes which are significantly lower than taxes on a home. You can hold until land values see a considerable jump or development plans are put into place.
Lease It – Another option when owning land is to lease it to a party that has a use for it. This translates into almost 100% for you. Some interested parties might be farmers, hunters or a nearby business looking for parking. Obviously, you will need to make sure the lot is zoned for what your renter intends to use it for.