No matter what type of investing you do, if you want to make money you need to be willing to invest the time and do your homework. This is true of Land Investment too. There are many investors who think investing in vacant, or raw land is the best way to go… but only if you know what you are doing.
Here are a few tips to get you started on your career in Land Investments. I’m not an attorney (and you should consult with one on all legal matters) but these tips will provide you with a little insight on some things to be aware of:
1. First of all, you must decide what you plan on doing with the land once you purchase it. Obviously, your ultimate goal for the land will be one of the main determining factors in the type and location of the land you want to buy.
If you are interested in starting a residential community on some land you will want to find land that is a little further away from town. But, if you are interested in starting a strip mall, for example, you want to find land right in the path of growth.
These are important things to consider even if you are planning on reselling the land in the near future. Remember, your prospective buyer will consider the location very carefully too.
2. You will need to be willing to do some leg work to find out everything you can about a specific parcel of land. For example, what is the zoning of the land and does it coincide with what you want to do with it?
What about sewer and water, electricity, roads, etc. Are these already in, or will you (or the developer) have to pay for them?
3. It is a really good idea to have a team. Assembling a team of other professionals that can help you with your land purchase will make your life a lot easier and minimize your risk. For example, having a knowledgeable and respected realtor as part of your team can make it easier for you to find great deals.
Also think about including a banker, a lawyer, and possibly surveyors to your team. Anyone who you trust, like, and can work with on a regular basis. Though they won’t work for free, they may give you a discounted rate if you are throwing a lot of business their way.
4. Consider what financing options you will have. Some investors who have been successfully investing for a long time may already have a network that they can turn to for financing.
If this is your first deal you may have to rely on a bank. Make sure you have all the information available for the banker to look over.
Most loan officers will get paid bonuses on all the loans they write so they don’t want to waste time with someone who isn’t prepared. Do your homework.
Land Investment can be a great way to invest in real estate. As with all types of investments, you can greatly reduce your risk by being knowledgeable and informed. Do your homework.