Real estate investing has gained well-deserved attention in the world of investing lately. Many people consider investing in real estate as a sure way of earning passive income. From renting houses to allowing the property to appreciate in value over time, there are many perks of investing in the housing industry. However, there is an aspect of real estate, specifically in land investment, that does not gain much attention for many reasons. Some of those reasons include the belief that the land doesn’t produce income, the land just sits there and does nothing, and it’s just flat out boring. The purchase of land is perhaps the most overlooked investments in the world of real estate. However, buying land is one of the best available investments today because of its idle characteristics and adaptability. This investment is also great for the long term when a land trust is implemented. What is a land trust? A land trust is the ability to pass on the land to a trustee when the owner dies. It evidently protects the asset owner from tax and legal proceedings.
Below are some of the best reasons to invest in the purchasing of land.
Hands-off Investment requiring no work
Once a piece of land is purchased, the owner does not need to do anything. The land is simply inactive. There is no dealing with tenants, construction, renovations, maintenance, or even rehabbing a property. The only piece of knowledge needed when purchasing a land is its suitability for building on top of it. For an example, a land could be deemed unbuildable if there are issues with the septic systems. If someone else is able to build on top of the land, a large percentage of the challenge is evidently won. Furthermore, most properties don’t require the buyer to physically be present at the location in order to purchase them. The entire process can be done virtually, allowing for a much easier buying process. Using free, available tools online, an evaluation can be easily done to determine the quality of the purchase. Because of the lack of structures and buildings present, inspecting the process is quite fast and easy. This makes it very easy to purchase land without ever having to physically see it in person.
Land is very inexpensive to own, with investors calling their own decisions
When buying land, the expenses are almost nonexistent. If any at all, property insurance is also very cheap. Additionally, land investors require minimal start-up capital for purchasing land. It’s very easy to buy land with cash you already have, and avoid banks and loans altogether. Landowners also have the power to include seller financing. Since many banks and lenders are hesitant to loan money for vacant land purchase, this created an opportunity for landowners to charge an above-average market interest rate by financing a land. Many buyers will gladly pay this fee as well, as no banks are willing to loan them the capital needed for purchase. Furthermore, this can be considered as a passive income stream, similar to rental properties, without the headaches and frustration associated with renting to tenants.
Very little competition, and it’s a scarce resource
They aren’t making more land, and investors take advantage of this knowledge. Since it’s a limited resource, purchasing land in the path of upcoming industrialism can lead to the necessity to buy your land in order to complete projects at any cost you choose. Additionally, many people looking to invest in the real estate world are all focused on houses, apartment complexes, and commercial properties. This sets a trend of competition and outbidding causing frustration and occurring losses. Many investors are uninformed in the land investment field benefits, leaving the clever investor with almost no competition.
When researched correctly, land purchasing is an excellent way to set aside some money with almost no risk involved. It is always the best tactic to pay for land using cash to avoid interest payments on loans. Starting out small and budgeting your expenses is also a great way to strategically invest in land. Working with a real estate buyer’s broker agent can be a great resource for locating, evaluating and comparing different lands. Typical real estate agents are most knowledgeable in the housing industry, not land. For this reason, you must make sure to research the land carefully, while getting the assistance of a buyer’s broker.