To invest in land:
1, Analyze land buying data in the local area
2. Use direct mail marketing to find off-market deals
3. Search in online marketplaces and tax auctions
4. Build your network with investors and realtors
5. Sub-divide large parcels of land
6. Follow all legal processes
7. Offer seller financing to buyers
8. Earn quick cash through wholesale flipping
9. Consult surveyors and zoning experts, and
10. Leverage real estate websites and brokers to sell your property.
The key to land investing is finding an undeveloped property under market value. It requires understanding the different types of land and their profitability potential. You should also study zoning regulations and property taxes. Set clear and achievable goals and decide on a budget. Leverage online sites for scouting properties. Zillow, Landwatch, Craigslist, and auction sites are great places to start. Conduct a thorough assessment once you find a potential land investment. It should have a good demand. There should also be future planned developments within and around the area.
Land investing may sound easy. But it's a tedious and complex process.
This guy said it's not the business for broke people. Raw land might take some time to appreciate. You need lots of back up cash to keep you afloat.
The Wall Street Journal reported an increase in demand for land post-pandemic. Expert realtor, Wayne Turner, believe that it's still a good investment. According to him, rich people buy land because it's scarce. As population increases, so will the demand for land. It's a valuable long-term investment.
This article breaks down the land investing business. The types of land investments are also explained. And, the 10 most affordable places to buy land in the U.S. are revealed.
10-Step Approach To Land Investing
Sharon Tseung: How to Find Off Market Properties Using Direct Mail Marketing
Find off-market deals by writing to people who might be facing financial distress. These are individuals going through divorce, money problems, and other life challenges. They might sell their property below market value. Use PropStream to create a list of potential sellers. Filter the list and focus on foreclosures and tax liens. Use tools to write your letter. Your two options are: Yellow Letters Complete and Open Letter Marketing. You can write as postcards and hand-written letters. Monitor the responses to track your progress. Adjust your strategies based on the responses.
Jerry Norton's Tips To Maximize Direct Mail Strategy
What are the Types of Land Investments
Raw Land: Barren land without improvements and infrastructure. It rarely has access to electricity and water. Others don’t even have access roads and right of way.
Agricultural Land: Its primary purpose is farming and livestock raising. These are fields, pastures, orchards, and vineyards.
Commercial and Residential Development Land: Commercial land is designed for income-generation. Used for retail stores, offices, restaurants, hotels, or warehouses.
Residential Land: A residential lot is solely intended for housing development. It is used for building single-family homes, apartments, condos, and mobile home parks.
Recreational Land: Land used for leisure activities. This includes camping and hunting ground, or fishing. Recreational land can provide passive income through rentals. Used for Airbnbs and glamping sites.
Which Land is Best for Investment?
Commercial land is best for investment. It has the highest income potential, especially in prime locations. Commercial land is typically leased long-term. So, you enjoy predictable monthly passive income from rentals. Holding costs are lower because tenants pay the taxes. Some even pay for insurance and maintenance. It also appreciates faster than the other types of land investments. Improvements in commercial land always increase the property value. So, the risks are lower and there’s better income potential.
How Much Does it Cost to Invest in Land?
It costs at least $20,000 to invest in land in the U.S. However, the price can vary based on several factors. The size of land and its purpose affect the selling price. The most expensive is commercial land. It costs millions of dollars in prime business districts. Residential land in urban areas starts at $100,000 per acre. It can go higher in upscale locations. Farmland ranges from $2,000 to $12,000. The price varies based on the area's agricultural potential. Rural and undeveloped land are the cheapest. They can go as low as few thousand dollars per acre in remote areas. Accessible locations are a bit more expensive.
What are the Costs Involved in Land Investing?
Purchase Price: Cost of the property based on its location and size.
Closing Costs: This includes land survey costs and attorney fees. Transfer taxes are also counted under closing costs.
Due Diligence Costs: The cost of environmental assessment and zoning compliance check. This includes land use study and market analysis.
Financing Costs (if you're loaning the money): Includes prepaid interest and interest payments.
Investment Property Tax: The average property tax rate is 1.10%. It is computed based on the assessed value of the property.
Legal and Professional Fees: Costs for legal advice, tax planning, and consultation.
Utilities and Infrastructure: Installation of water and electricity. This also includes sewer systems and access roads.
Kai Andrew Believes It Is Best To Buy Land in Rural Areas
Kai Andrew believes it is best to buy land in rural areas. There's less competition compared to urban properties. The price of land is also cheaper. Square footage can go as low as $5 in low demand areas. There are also fewer restrictions on rural land compared to urban. This means low barriers to entry for real estate investors. Land in rural areas offers great potential for rental properties. The unique location and experience attract more guests. These factors contribute to higher returns.
10 Most Affordable Places in the U.S. To Buy Land in 2024
How to Make Money Investing in Raw Land?
Subdivide large parcels of land into garden plots for lease. People who want to grow their produce can rent them out. You only need basic garden tools and water supply to start. Create a community market within the area to increase the rental garden’s value.
Leasing your raw land to billboard owners also earns passive income. And it increases the value of the real estate property.
Building a campsite is cheap and requires little capital. You don’t need to build a structure. Just a water supply and a hook-up for RVs. This is ideal for lands with scenic views.
Investing in Land Pros and Cons
Pros of Land Investing
Land appreciates over time
Can be used for various purposed like residential development, commercial projects, and agriculture
Vacant land is low maintenance
Increasing demand in some areas
Cons of Land Investing
Harder to sell compared to other types of real estate
Recurring expenses like property tax, capital gain, and insurance
Doesn't provide immediate income
Land appreciation is dependent on market trends
Natural calamities and environmental conditions can decrease the value of the property
Key Considerations When Investing in Land
Location: Look for areas with growth potential. These include economic expansion, population influx, and planned infrastructure developments.
Bigger Down Payment: Buying land requires larger down payment than buying a house. You'll need 20% or more. It also has a shorter loan term compared to first home purchases. The maximum loan term for vacant land is only 15 years.
Zoning and Land Use Regulations: These will dictate what you can (and cannot) do with the property. Research for potential development restrictions of the property.
Market Trends: Consider the property value and current demand. Also, look into the overall economic condition of the area.
Utilities: Ensure the area has access to water and electricity. There should also be a proper sewage system. It should also have signal and internet access.
Future Development Plans: Look into future development plans in the area. Construction of new roads and schools will increase property value.
Legal Issues: Ensure the land has a clear title. It should not have legal disputes or outstanding liens.
Purpose: Determine what you want to do with the property. This includes developing, holding, or leasing the land. Most real estate investors resell the land for profit. Understand your goal and the steps you need to take to get there.
Investing in Land: Reddit Experiences
8 years ago, people already think it's a terrible investment. It's only a good investment if you intend to use it for farming or as timberland. You can't get an investment land loan on unimproved land. Access to basic utilities like electricity might also be expensive. Even installing a septic tank will require a special permit from the county.
You may lose more than you gain with raw land investing.
In recent times, people still think that land is an alligator. There's no cash flow and you constantly pay for holding costs. It may not be a good choice if you want to monetize the investment.
Connecting basic utilities to your property remain to be the biggest concern. Your investment might get stuck in the next 10 years.
Land Investment Courses
Dan and Ron Apke's Land Investing Online is a beginner-friendly land-flipping course. Participants learn to buy and sell vacant land at a profit. The platform offers different learning packages. Land Investing Bootcamp + CRM, offers both modules and system. And, the Land Flipping Bootcamp, which is a 16-chapter course.
Jack Bosch's Land Profit Generator teaches practical land-flipping strategies. It focuses on buying cheap land from distressed sellers. The goal is to flip the land for profit. The platform offers both free and paid learning options. It also includes a comprehensive coaching program for personalized guidance. Its key program is the Land Profit Quickstart. There's also an in-depth coaching program for serious investors. Both offer a low-capital entry to the real estate business.
The Land Geek by Mark Podolsky teaches individuals how to generate passive income from raw land investing. Mark emphasizes in this course that land investments can be managed remotely. You don't need to physically check the property. His goal is to automate most parts of the process. This system scales the business fast.
My Alternative To Land Investing: Digital Real Estate
Digital real estate is a better investment than land. The costs are lower because you only need domain names and websites. You can manage digital properties virtually. So, it's easier to develop and maintain. It also appreciates faster than raw land. It takes years for land to increase in value. But, ranked sites make money in just three months.
Land investing is risky. It's hard to find high-potential properties under market value. Raw land also appreciates much slower than developed real estate. If you can't connect utilities to the land, it decreases in value. It's common for investors to lose money on land investments.
I prefer digital real estate because it only needs minimal capital. You can start with just $500 to $2,000. The demand for digital real estate is also increasing in this digital age. Digital properties can reach a global audience. So, you have a larger potential customer base. The risks are lower in case the market conditions are unfavorable. They're also cheaper to maintain. You only need to pay for hosting fees, domain renewals, and occasional updates.
Think long-term. Go for digital real estate if you're looking for an investment that earns passively.
