When you think of investing in land, your first thought might turn to land that is already developed. Most people are familiar with the concept of buying developed land as an investment—but what about buying empty land?
This often causes more confusion, but there are excellent reasons to buy undeveloped land. Firstly, there are very few maintenance costs involved. You will not have to worry about property taxes or repair costs, and you can lease the land out to someone who will use it. This allows you to keep hold of the land for a long period of time without many costs involved at all.
Then there is the fact that some great deals are available. Owners of empty land are more likely to sell because they earn nothing from it, and this can present a great opportunity for investment.
But how should you go about investing in undeveloped land? Here are some tips to get you started.
Do Your Research and Target Strategic Land
One of the first things to do is identify land that is located strategically. This will be somewhere that is affordable at the moment, but which has the potential to rocket in price over the coming years once the land becomes mature, meaning when it is ready for development.
Not only do you need to select the right land in the right areas—you also want to make sure you are paying the right price for it. As you can imagine, all of this takes a lot of research.
If you get your research wrong, you could find that you end up losing money rather than making it. Problems can sometimes occur when you do not narrow your research area. You cannot research everywhere in a country as large as Canada, so it is better to become an expert in one region.
Flipping land involves buying land that is cheap and which has not yet been zoned for development, then selling it when it becomes zoned—when the value can go up considerably. The difficulty comes with choosing land that will become zoned, and this involves looking at a range of key factors. For example, land that is near to existing infrastructure has a better chance of being developed compared to land far away from anywhere. Land that has good access may also be a better option.
Always Inspect the Land Yourself
Always physically inspect the land before buying it. Don't be tempted to just look at photos or to use a satellite mapping tool like Google Earth. Maps can be out of date, and you will get a much better idea of the situation when you visit. It is much harder to inspect remote land, but it is still crucial, so don't be tempted to skip this step. This is one of the most important steps if you want to avoid the common pitfalls of investing in land.
You may also want to carry out a land survey and a soil test to make sure the land can support buildings. An environmental site assessment could be a good idea, and you want to review the zoning and find out about any restrictions.
Prepare to Be Patient
Patience is essential when investing in undeveloped land, and this is a not a fast way to make a quick buck. Sometimes, you may have to look further away from towns and cities, and this can mean a longer holding time. Although it can be a good long-term prospect, it will involve being patient. It can take decades from researching the land to purchasing to reselling, so don't expect to make any significant profit for a number of years.
Use a Specialist in Undeveloped Land
Perhaps the best step that you can take is to hire an expert in growth stock opportunities. Specialist investment firms are constantly evaluating opportunities and pinpointing the best options. They can take a lot of the hassle out of the process of researching and choosing land. Some companies may purchase the land, obtain the development permits, develop the infrastructure, and sell the land, and they valuable experience that you may want to take advantage of.
Look Into the Possibilities of Investing in Undeveloped Land
Undeveloped land is often a misunderstood investment concept, but it can present an excellent option for many people. It does not depreciate, you do not have to look after it, and there are some great deals available if you know how to find them. So start your research or use the services of a company that is experienced in finding investment opportunities, and find a patch of land that has good prospects for development. If you are prepared to be patient, there could be a lot of money to be made.
Mr. Treminio has over 20 years of experience in the financial markets with special focus on corporate financing for private and public companies. Over the years Mr. Treminio has assisted a number of different public companies meet and/or secured their capital requirements. The majority of these companies have been listed on the micro-cap over the counter market and NASDAQ. He has also served as key investor and has provided bridge financing to many of his previous clients. He officially started his career in private banking with Dean Witter Reynolds, having completed the renowned Dean Witter Stockbroker training program in 1994 in New York city. Mr. Treminio also worked at PaineWebber. Mr. Treminios specific set of skills are to provide businesses with effective strategies on corporate structuring and/or packaging, negotiations, gathering market intelligence with the objective to secure working capital for growth, expansion, as well as for mergers and acquisitions. Simultaneously, providing parallel guidance to gain market recognition, shareholder value and liquidity. Mr. Treminio attended studies in Business Administration at Loyalist, College in Belleville, Ontario, Canada from 1989 through 1993.