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What are the Best Tips for Land Investors?

Article Details
  • Written By: Erin J. Hill
  • Edited By: Bronwyn Harris
  • Last Modified Date: 28 April 2019
  • Copyright Protected:
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    Conjecture Corporation
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There are many tips for land investors that can help them both see higher profits and lower the risk in investing in all areas, developed and undeveloped. The most important thing for investors to remember is to research any areas they are considering investing in. They should also become familiar with markets in various locations and learn the trends for buying and selling in those areas. Investors should be prepared for the worst case scenarios of real estate investing, which can include waiting for long periods of time to find a buyer or losing money on a property.

Land investors should expect an undeveloped property to take a while to sell in many areas. This is especially true when new construction rates are down. It is possible to maximize the chances of a sale if potential investors do a little research before purchasing a property. For instance, many towns and counties list upcoming development or have this information available if requested. Investors may choose to purchase land in areas that will become more developed years in the future and then resell for profit.

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Sometimes land investors may be able to find land for well under market value by purchasing lots in tax auctions. This is land that is sold when a previous owner has failed to pay his or her yearly property taxes. Many times, such land is in low-income areas, but for those who wish to develop rental homes this may be an inexpensive option. Investors should be aware that sometimes additional liens and judgments may exist against the property and these things may affect a sale later on without a legal resolution.

Other ways to save money include asking around about large areas of land which may be broken up into smaller lots. Sometimes if an area of several acres stays on the market for a long time, sellers may be willing to break it up by the acre so that less money can be spent up front by investors and developers. Buying many acres at once is generally less expensive based on a per acre price.

Land investors should keep in mind that nothing happens overnight. Buying a good property and developing it into something sellable takes time and money to accomplish. It is not an overnight business, and most investors lose money along the way while learning the ropes.

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