It’s probably a thought that’s crossed your mind time and time again. When you first started up your investment portfolio, you were surfing through property listings and every so often, a piece of land would come up for sale.
But seeing as you were in the market for a good investment property, you scrolled on by.
However, the idea of buying that land might have stuck with you. After all, there’s many different things you can do with a plot of land – and the value of said land is only going to go up over time.
So, now you’re a more experienced investor, and you’ve got some real estate chops to go off of, should you actually seriously consider buying land?
Pick Your Location Just Right
If you’re planning to buy land, you need to understand why you’re buying it. When you know the why, you can pick your location just right.
So, do you want to develop it into something residential, like a new apartment block or a housing estate?
If so, you need to purchase land that’s easy to access by car and public transport. This both appeals to families and young professionals. Similarly, you’re likely to need land that has plenty of green sites and space for family life – or for walking a dog.
There Could Be Lots of Restrictions
That’s the best thing about buying a property, instead of land for a property to go on. You already know the property is good to go!
You don’t need to build anything new, and as such seek out permission from relevant authorities and/or consult with zoning law experts. You’ve got a ready-made property you can do what you want with, whether that’s renting out or selling on for a profit.
Another thing to be aware of, in terms of land investments, is how other bodies may want to make use of the land in future. Yes, you could get a very lucrative deal from another private investor – and it’s up to you whether or not you take their offer.
But the government themself may also condemn the land for public use too, at which point you’ll want the services of an eminent domain attorney on your side. You need to make sure the deal a public body puts forward is just as good as the deal a private one might serve you.
But remember, when dealing with local authorities, there’s likely to be a lot more pressure on you to accept.
Are You OK Holding it for a Long Time?
It’s rare for land to make a profit within the first year after purchase. You’re going to need to develop it before you sell it on or rent it out.
That’s a big cost sink to cope with, and it could be 5+ years before you see a return on your investment. Are you OK with that?
Buying land can be a good investment. But weigh these pros and cons carefully beforehand.
