The Land Market & Why It’s Different

A good portion of first-time buyers and sellers of land expect the market dynamics for vacant land to be the same as a residential sale. They are NOT. When getting prepared to sell a piece of land or home lot you need to understand the difference between the land market and the existing home market.

• Land Requires Different Sales Techniques - Having a beautiful photogenic bathroom or kitchen might be important when selling a house. Vacant land is Different. You need to understand the value of the property and how to sell it. Instead of kitchens and bathrooms, you need to start thinking about perc sites, the ability to build, and natural resources found on your property.
• Patience Is Key -  Understand that the number of people trying to buy and sell land is only a small percentage of the population. Being patient with your investment will be your best tool for making a profit off of your property.
• Land Buyers and Home Buyers are different - Generally, home buyers are looking for move-in-ready, renovated bathrooms, granite counter tops, and a beautiful yard. Land buyers are typically investors, land developers, or folks looking for a place to build their dream home.

All that being said, lot and land markets continue to heat up across the country. So don’t be discouraged--People successfully sell lots and land every day!

How to Make Profit off of Your Vacant Land Investment

Considering that vacant land is one of the most limited resources in the United States, it is one of the safest and secure investments you can make. Because of the finite amount of land, and the inability to make more of it, land is becoming more and more sought after. 

Vacant land is probably the only real estate investment that does not have any cons. It’s pros are considerable: no buildings to worry about maintaining, it won’t burn a hole in your pocket with ridiculous expenses, and you don’t have to do anything with it if you don’t want to!

Being that land is becoming scarce, investors are growing more and more attracted to it. A definite benefit of vacant land is the fact that there are not buildings, meaning there is little to no maintenance compared to other common Real Estate investments. There are no leaky roofs to fix, unclogging of pipes or replacing carpet to deal with. Minimal upkeep is the beauty of a vacant land investment and if you work with a reputable seller you can generally get vacant land at a discounted price.

A couple of the easiest options to make money on vacant land are; leasing your land to a farmer, leasing your land to a rancher, selling wood from your property, renting your land to a solar company, or renting it to a hunting club. All of these options are simple ways to make a passive income off of your vacant land.

Why Invest in Raw or Vacant land?

A traditional investment portfolio might consist of stocks, bonds, precious metals, currency, or even a new form of electronic currency. But recently investors have been turning away from more “conventional” investment options and have been turning to vacant land. Friends and family ask me all the time, “Why should I invest in vacant land?” My answer is always the same simple answer, "Money!"

For hundreds of years, Land has been a priceless commodity. We need land to grow, but we never seem to have enough of it. That is why in little to no effort at all to assure a great return on investment (ROI).  The essential factor dependent on the amount of your ROI is the path of growth.

To get the best results when investing in vacant land, research the surrounding areas. Figure out the demographics, the future development plans, population, local attractions and landmarks associated with the area your planning to purchase. Purchasing a piece of land in an area where the population is prospering and growing will be your best way to solidify your investment. The value of land can slowly appreciate, similar to watching paint dry, or it can skyrocket instantaneously overnight.

It does not require a seasoned investor to understand how to make a vacant land investment. It just requires a patient and research-driven investor.

3 Things you need to know about Ranchettes

Ranchettes are not considered ranches.

    Ranches are extremely large plots of land - they can be well over a couple thousand acres - where the most common “product” on a ranch is animals and livestock. On a ranch, you can usually find the main residence, more than one barn, other structures needed for cultivation and maintaining animals, an agriculture section and another part dedicated only to livestock.

Ranchettes are not farms.

    A farm is much like a ranch in that it is generally a large plot of land. But a farm has a focus on everything agriculture-related, where crops are grown and cultivated, rather than animal and livestock-related. Farmers also have what's called fiber farms. Fiber Farms are where raw material such as silk, cotton, wool or hemp is grown and picked. The word “farm” itself can mean any plot of land that is dedicated to a specific crop, raw material or product.

Ranchettes are a hybrid between a ranch, farm, and house.

    A Ranchette is not as large as a farm or a ranch usually maxing out at 40-50 acres. Usually placed on the outskirts of a city where its far enough away to create a country living lifestyle, with the convenience of a large city nearby. These plots usually contain one house, a small garden, one to two barns and a small cluster of livestock or animals. These animals could be everything from a couple heads of cattle, chickens, goats, or maybe even a Llama or two. It’s the easiest way to have a quiet home life without living in the “sticks”.

Three things to Consider When Deciding on How Much Land You Will Invest in

Different land investments vary in size and price. Some more affluent land investors might have millions of dollars to invest in a new portfolio and some smaller investors start with only a quarter of an acre! Your first investment will mainly be determined by the capitol you have available.

Here is a list of 3 quick and essential things to consider when buying land:                                                    

1. Budget

Budget is the primary factor in figuring out how much land you would like to purchase. First you’ll need to figure out how much extra income you have to put towards the investment. The wonderful thing about vacant land is the variety of different land options for different types of investors as well as different price points.

2. Location

After determining your budget, location is key to figure out where you want to purchase your land. Depending on where you would like to make your investment, price per acre will fluctuate. Sometimes buying land in a rural area is significantly less than buying near a city center. If your reason for buying property is to develop it, privacy and lot size may be at the top of your priority list. 

3. Improvements

The last thing to consider are land improvements. Making any improvement on the land may not be needed if you are purchasing land solely for investment purposes. The cost of clearing the land is something you will need to consider if you plan to develop it. If you have a small lot that isn’t heavily wooded, you can probably clear it yourself with some rented machinery in order to cut back on costs. Additionally, one of the most valuable resources on your lot could be the wood or vegetation on your land. For instance in Florida, palmetto berries are a great way to make a profit from your property. Palmetto bushes are native to Florida and widely known, but many people don’t realize that these berries are used to treat prostate problems, including cancer. Research labs will pay heavily for the cultivation of palmetto berries.

3 Things To Consider When Buying Vacant Land

What’s coming next? What options will I have to make money before I sell my new asset? How liquid is my asset in a time of crisis? These may be the questions a potential should ask themselves.

The basis of of any investor’s  always be made by determining what’s coming next. They are going to have several options to utilize the asset before they sell their asset. Finally, they will know how easily that asset can be liquidated into cash in case of an emergency. All these things are especially important when an investor decides to purchase a new plot of land.

What’s coming next? Does the investor know that this new land purchase will be in the path of a growing economy? Do they know if it’s near growing metropolitan city? Will a company want to buy this land from them for its natural resources? Will a company want to build a factory on the lot purchased? Being able to take all things into consideration will allow the investor to make the right decisions by looking into the near and far future and seeing what lies ahead.

What opportunities will I have to make money before I sell my new asset? One of the obvious options is by renting land to larger companies. Will wind or solar power want to rent the space from me? Does my lot get more wind or sun? Is it in a valley? Is it flat enough for solar panels? Can I create connections quickly enough in the solar or wind industry to make a quick profit? Knowing what you are going to do with the land before you buy is a great thing to contemplate before you buy your land.

What is the liquidity of my asset? Meaning, how fast can I off-load this asset in a time of need for myself, my family or my company. An asset that you can not sell to someone else quickly might not be an “asset” to you at all. Finding a plot of land for a reasonable price that you know will increase in price over time will increase the liquidity of your land. Also, liquidity might be determined by how much land you can donate and turn into a tax write off. Investors all over the United States are donating land to save other parts of their income. Land can be a simple way to lighten your tax burden in a couple years when you need it the most (especially if you buy it for a lower price and inflation brings its price up over time). It could be the difference between bankruptcy and foreclosure and staying alive.

Finally, what all investors need to remember when buying land is that it is full of different commodities - raw materials that can be bought and sold. Your job as an investor is to determine what commodities can be used to make short term gains while you wait for the long term payout.

Why Property Without A Structure Can Be A Good Investment

What do you normally think of when you think of real estate investment? Most people think of the HGTV version of real estate investment, the whole “let’s go spend a crazy amount on a house, spend even more money to fix it up, then, sell it and make millions.” This is a nice notion, but unfortunately it does not always work this way, especially with the real estate market being as unstable as it is.

What if you could have a practical real estate investment that always appreciates and almost never depreciates? This investment would also be something you don’t have to constantly maintain it, you don’t have to be professional handyman, you wouldn’t have to deal with tenants, you would almost never have to deal with a banks red tape, and there is a high possibility you could make money on your investment in only a few months after purchase. Who wouldn’t want that type of investment?

Buying property or vacant land without any structures on it is the easiest way to invest your money, forget about it, and just let it grow. Land without structures mean no midnight, “something broke again” phone calls. It means no rushing to make sure everything is perfect before you flip the house. It means less insurance problems, no headaches, and no worrying about figuring out how you are sinking all your money into a money pit that is probably not going to return its investment. Two unfortunate “money pits” in life tend to be boats and houses. This is because houses depreciate with age, just like cars, boats and electronic devices. Land, on the other hand, has historically always appreciated in value over time.  So then why do people invest in multiple income properties? Probably because they love working way to hard for little to no return.

The only cost of vacant land is merely the cost of the land itself. You don’t have to “do” anything to it. That being said, you can lease or rent it out to other people who can utilize it. In which case you have created a great source of passive income without spending a dime on structure! Oil companies, natural gas companies, solar companies, wind companies, ranchers, farmers, hunters are just a few examples of who might be interested in utilizing the land! Thousands of companies need land to harness natural resources and are more than happy to pay for it.

So along with the fact that you won’t have to deal with banks when purchasing, you also won’t have to worry about making a quick turnaround (like flipping a house).  Another positive to purchasing vacant land without a structure is that you do not have to take care of maintenance, and you won’t have to tender to your tenants. Finally, the easiest part is that don’t have to do anything with the land other than just let it sit there, all while earning a passive income off of it.

5 Reasons Why Vacant Land Is A Good Investment

 With vacant land, you don’t need to “do” anything to the property.

You have the option to not touch your land at all or to make it into something beautiful, what you do with it doesn’t matter. Land will always appreciate in price over time due to the population increase and the fact that companies needing large open spaces are being moved into more rural areas. The simplest thing an investor can do to their vacant land is turn it into a nature sanctuary. In which case you won’t have to “do” anything! Just allow mother nature to run her course and your lot will return to its natural state.

 “Hands-Off” Investment

Don’t worry about dealing with tenants, leaky sinks, toilets, mold, pet issues, bursting pipes, broken a/c, and any of the other late night “it’s broken again” issues.  After your purchase, the land will just sit there, and nothing happens to it unless you say so. You can create an income with your property, in which case you won’t have any maintenance upkeep and it will become a reliable rainy day fund.

You can create income with vacant land.

If you choose to go this route you will have the opportunity to rent or lease all or part of of your land to larger companies. Depending on the location and type of land, it might be ideal for wind and solar energy. Wind energy is a clean, renewable, and lucrative new form of energy. The use of which is only expected to increase in the coming years. In almost all of these cases a large piece of land is simply leased out by a power company. They will then place a wind turbine on the land, maintain the land around the turbine, and filter out power to all the surrounding areas. Solar energy companies are also looking for land to harness the power of the sun. Solar energy can be used to power everything from a city to a house. You can harness it yourself by purchasing solar panels and all the other equipment or you can also lease the land to a larger solar company and reap the benefits of having them take care of your land. But this is only the tip of the iceberg when it comes to leasing land for profit.  This isn’t even considering all the farmers, ranchers, timber companies! Thousands of companies need land to harness natural resources and are more than happy to pay for it.

Land is very inexpensive to own as a long-term investment.

More money than mutual funds, more stable than stocks, less inconvenient than income properties, why wouldn’t you want land? It is a cheap ,easy way to invest money into an asset that can be held over time or liquidated at the drop of a hat. Holding the right property for the long-term can make a lot more sense than any other retirement plan created.

They aren't making anymore of it.

You can’t build large quantities of land quickly, so when progress is halted due to lack of land, people who purchased the land in the path of growth have an awesome opportunity to make money by renting properties or by selling properties.