Investing in land is a different experience than putting your money into more traditional commercial property types. Investors who tend towards land choose to purchase a plot of ground in hopes a developer will approach them to build a commercial property on it. Read below to find out more about investing in land.
Investing in Land: About Development Land
Unlike raw, undeveloped land, development land may already be zoned for commercial purposes and have utilities like gas and water connected to it. Investors can expect to pay more to own and hold development land, but on the flip side, it often sells much faster than raw land.
Investing in Land: Research
Investors should research the area they’re looking to buy in and try to discover trends in the different sectors. If it’s clear an industry is entering a growth phase, and companies will soon need more space, investors should study where they’ll likely be building and invest in land there. Same goes for land zoned for residential properties if the population experiences a boom. If the data investors used was solid, development companies will be knocking on the door to purchase the now valuable land from them.
Investing in Land: Be Careful
Investors should be careful when investing in land. Unlike a commercial property, which generates income through leasing, there is very little money to be made off land until it’s sold. For the most part, investors will lose money to it every year in the form of taxes. That’s why it’s important for investors to have a plan to sell the land quickly and for the most profit.