Investing in land can often be a safe bet. It's not like the land will ever get old or outdated and at first glance there is nothing that needs repair-—it's land. Buying land as an investment can set you up for the future or sink your money into a hole, depending on how you develop or sell it for profit later. Understanding some of the key components to investment land purchases can save you time and money.
Go land shopping. Before buying any land, it is important to know what is out there. Check online sales by owners, work with a real estate agent and talk to friends and family about land parcels they may be aware of. Write down every piece of land you visit, including location, size, price and whether it is already prepared for development to help you do a comparison study later.
Select the type of land you want to purchase. Depending on local government zoning ordinances, some land will be able to sell for commercial use, while other land is strictly meant for residential. Even the residential properties, however, are zoned for different types of use. The land may be ready for an entire subdivision, a condo complex or an individual home. The type of land you purchase will depend on several factors including how much money you have to invest and how long you are willing to wait to turn it over for profit. Subdivision developers typically look for land that is near amenities, but not surrounded by industry. Commercial developers generally buy land that is at the hub of local activity.
Choose the parcel. Take the address to all local government entities to be sure it is zoned as presented by the Realtor or owner. You don't want to buy land to sell to a car manufacturer only to discover nothing but single-family homes can be built on it.
Make an offer. Take into consideration any costs you will incur to prepare the land for resale. If you will have to have the land prepared, this should have an impact on your final offer price. Alternatively, you can request these things be done before the purchase is complete as part of the land deal. Be sure to make the sale contingent upon the land passing an inspection.
Have an inspection. Even without a building on the land, it is important to have an inspection done before completing the sale, to make sure there are no serious topographical issues such as a sink hole or otherwise.
Attend the closing. At this meeting you will sign all documents, pay the final cost of closing the deal and become the proud owner of investment land. if the deal is between you and the owner, make sure a real estate attorney oversees the process and helps you record the deed in your name at the courthouse.
- How to Transfer SEP IRA Investments Into a Land Investment
- How to Purchase a Home From a Private Sale
- How to Find Out What Your Land Is Worth
- How to Buy a Foreclosed Property by Paying the Back Taxes
- Is Raw Land a Good Investment?
- Guidelines for Purchasing Vacant Land
- Reasons Not to Buy a Timeshare
- How to Rent Out Farmland