Land is a solid investment with fewer recurring expenses than most property investments. The only regular cost is the property tax, which is typically low.
Investing in raw land is becoming increasingly popular. The location of the land is crucial to its viability as an investment. The zoning can significantly impact the timeline of an investment deal.
It’s Cheap
Raw land is one of the cheapest asset classes in real estate and offers a low-beta diversifier to your portfolio. It is not for the faint of heart, however; a successful investor knows to be ready for surprises and always perform proper due diligence. This includes thoroughly reviewing zoning regulations, topography, required annual taxes, public utilities, usage restrictions, and road access.
Vacant blocks of land are often described as “hands-off” investments because, unlike rental properties or stocks and mutual funds, which must be managed by a professional, there is very little to maintain the land. Depending on its size, location, and shape, it may be an excellent way to hedge against inflation, as it tends to appreciate at the inflation rate over long holding periods.
If you are considering buying raw land for sale, paying cash rather than taking out a loan is wise. This will save you interest payments and allow you to liquidate quickly if you find another opportunity. It is also better for your peace of mind to avoid debt and get your finances in order before investing in anything.
It’s Easy
Buying land at cheap land for sale in Tennessee is not only easy, but it can be pretty profitable. With a bit of research and hard work, investors can purchase land for sale with an attractive profit margin and low risk. In addition to financial gains, owning land can be a personally rewarding experience. Whether it’s taking in the views of snowcapped mountains, relaxing in a hammock in the middle of a forest, or spending time in your vegetable garden, owning land can provide a sense of satisfaction and peace of mind.
Investors can find raw land for sale at auctions, county tax sales, and through wholesalers who often target specific geographic areas for their marketing campaigns. However, purchasing raw land on speculation can be risky and lead to a financial loss if you don’t do your due diligence. That’s why it’s essential to prioritize your research and understand the market. For example, you should check the zoning on the property to determine whether it can be used for commercial or residential development. It would help if you also asked the seller and inspectors about any existing or proposed developments in the area.
It’s Simple
Owning land provides more than just financial benefits for savvy investors. It also allows owners to enjoy scenic views and a sense of independence. Compared to the more restrictive and complicated ownership options of condominiums and rental units, owning land is a relatively easy investment that gives a unique sense of freedom and security.
As with any real estate investment, research and due diligence are the keys to a successful outcome. Considering current market conditions, mortgage rates, the local economy, and the area’s future development will help determine how much you can make from your raw land investment.
If you want to flip residential lots, check zoning laws and ensure the lot is buildable. You’ll be surprised at how many properties are listed as vacant but can be made into a home with a little bit of hard work and effort. You can also invest in farmland to reap the rewards of sustainable agriculture. This type of investing often involves hiring a farm manager to run the operation for you in return for a share of the returns.
It’s Safe
When you invest in land, it’s a low-risk investment. Land prices usually go up, not down, and it can take years for your investment to produce a profit. This makes it a good investment for investors looking for a slow, steady return on their money.
Raw land is not traded on a public exchange, so knowing what to pay for it can take time and effort. This can lead to overpaying, which can be very costly. However, buying land can be an excellent investment if you know what you’re doing and do your research.
Land investments also tend to have fewer reoccurring expenses than other property investments, such as mortgages, repairs and maintenance, insurance, and utilities. The only reoccurring cost for most landowners is the annual property tax, which can be a significant expense for small investors. This is why novice investors must honestly evaluate their financial situation before purchasing. This will help them determine whether raw land is a safe investment for them.
It’s Fast
While investing in real estate is relatively time-consuming, a well-planned strategy can make it very quick. Unlike houses or retail buildings, land doesn’t require extensive remodeling or construction to be ready for a buyer. As long as you have a buyer lined up, the buying and selling process can take as little as 30 to 60 days. Financing a land investment is essentially the same as funding any other property, with the option of obtaining a conventional mortgage or hard money loan.
When buying raw land, you can do several things to generate income from your investment, including leasing the property on a short- or long-term basis to collect rent. Although this strategy may not be as exciting as seeing walls go up or receiving a check in your mail, it can help you build a steady income stream. To increase your returns, you can divide your raw land into multiple smaller plots and sell them to individual buyers.
