Vacant land offers an investment opportunity that is often overlooked by many investors. There are many advantages to land investing that can make it an excellent investment vehicle for those who recognize the many opportunities that exist in vacant land investments.
Many investors overlook vacant land because of the misconceptions surrounding land investment. For instance, doubters are often unaware of the opportunities that exist in vacant land, and instead only see a vacant property at face value.
There are many erroneous assumptions about land investments. In this article, we will explore some of those misconceptions and outline some of the benefits of investing in vacant land and why it’s one of the most worthwhile investments right now.
It’s a Tangible Asset
The term “tangible asset” meaning that it is material and physically existence (one can touch, see, feel it, and even use it). There is a sense of comfort in knowing that you are investing in something that physically exists.
Unlike intangible assets, you can directly measure tangible assets. Although these two types of assets are both valuable, tangible assets are often more secure.
Buying vacant land is indeed more affordable than buying land that already has buildings or structures on it. As all real estate investors know, today’s high property prices, especially in major cities, can be a real financial struggle for property buyers.
Buying vacant land allows you to enter the real estate market with less capital. If you want to embark on real estate investing, you can start by purchasing land and do what you have to do about it. You can either build on it or let it appreciate as it is.
Also, the insurance rates and property taxes when buying vacant land are much lower than when you purchase a property. Land investment also doesn’t require you to hire and pay a property manager to supervise your vacant land or stress yourself out looking for or evicting tenants.
Since you don’t have to shell out a significant amount of money to buy vacant land, you can always pay it for cash. It means that you also don’t have to pay interest payments which can eat into your returns on investment.
Little to No Maintenance
One perk of investing in vacant land is that you don’t have to worry about major maintenance. You don’t need to repair or renovate something in it. Besides mowing the lawn to maintain its good condition, tending a vacant land doesn’t need much work.
Investing in vacant land is a hands-off, long-term investment as it doesn’t take up much of your time and effort. It’s an excellent investment for those people who want less stress in life.
When it comes to vacant land, you can more or less expect that it will stay in the same condition as you purchased it. While unfortunate occurrences such as fires and flooding, can negatively affect land value in the short term, the land will eventually recover from such events over time. The value of land over time will almost always appreciate.
This appreciation in value typically comes, especially to plots of land located in an area where there’s a recent economic growth. For instance, places that have been undergoing development or rezoning to become commercial or industrial centers. Such sites are boon to landowners as prices of vacant lands will surely increase.
Much Less Competition
Real estating investing can be highly competitive in desirable areas, whereas vacant land is often much easier to get an undervalued vacant land property
As we all know, real estate investors overlook the smaller amount of competition in vacant land investing. They often go putting their money in commercial properties, houses, and apartments, where they may find themselves overpaying for properties due to the competition to acquire properties.
However, if you want to find a better deal and significant returns on investment, you should invest in vacant lands as there’s very little competition in this field.
A Significant Income Opportunity with Seller Financing
Banks are not game when it comes to lending money on vacant land. You can turn this scarcity of financing when it comes to land purchase to your advantage.
For instance, you can add seller financing when selling your vacant land for a more income opportunity. Seller financing will help you attract more buyers that will pay your interest rate charge, even if your rates are higher than the market.
Investing in vacant land is not an undesirable asset class that it can often be seen as by many investors. On the contrary, it has a lot of advantages that you can’t find in other real estate investments. The benefits of land investment mentioned above will help convince you to try this good income-generating endeavor.
Robert Tropp is a seasoned real estate investor who specializes in small balance real estate with an emphasis on owner financed land properties. Robert has been involved in thousands of real estate transactions as a buyer, seller, and wholesaler.