Invest in Land – Tips for Choosing the Right Property

If you would like to invest in land, you will be glad to know that you do not have to be a big time real estate developer or have all that much money. Investing in land, whether for residential or commercial development, can be a very profitable endeavor, just as long as you educate yourself first. In fact, many experts view land investments to be one of the more sound strategies for any investor—large or small.

So, why should you invest in land, rather than a home, condo, or commercial building? Underdeveloped land offers many advantages to investors that cannot always be found in developed real estate markets. While investing in already developed properties can be profitable too, you literally have more room to work with when investing in land.

Some benefits of land investments

Simple management
More options in the long run
Limitless opportunities on how to develop the land
Great financing terms
Those who invest in land usually acquire very high returns
Plenty of flexibility for maximizing the value

Many investors consider land to be relatively safe investments, just as long as the location is in a good area. Indeed, this type of investment also brings in extremely high returns. If you want to consider cash on cash returns, land investments bring in HUGE amounts of profit (approximately 200%!) when compared to the average 4-8% returns of stocks and bonds.

Reasons why you should invest in land

One great option is to invest in planned developments that are still in the pre-construction stages. Many land projects in the pre-construction stage are in popular secondary home locations. As long as you are a smart investor, you can have the advantage of owning part of a developing, desirable neighborhood in which only a few other investors have a hold.

Since price appreciation of secondary homes is increasing very fast, now is a great time for you to invest in land. Financial experts agree that the future outlook for the second home market is very strong—and, in some places, even stronger than the primary home market! Part of this reason is because the baby-boomer generation is now planning their retirement by buying retirement homes in attractive locations around the world—particularly in places like Florida and the Caribbean.

Tips and warning

It should go without saying that you should never, ever invest in land without a real estate attorney and advisor at your side. Make sure you know what you are getting yourself into. While you are at it, make sure that the location is accessible for all the necessary water, electric, and sewer connections. After all, you will never be able to construct and develop a good home without access to these things!

Also check out the property’s deed restrictions, to ensure that you are indeed able to build on the land you invest in. If you invest in land that is already under development, demand a list of everything that is restricted on the property. And, you must never, ever forget (and hopefully your financial advisors will remind you) to check out the zoning laws in an area!