The stability and simplicity that comes with owning a good piece of land, bought at the right price, may far outweigh the myriad of issues that come with any kind of real estate. If you have overlooked raw land as a good investment opportunity in the past, take some time and get educated regarding what land is about.
Below are the some of the reasons why you should consider investing in land:
Raw Land is Basically a Hands-Off Investment
The best thing about vacant land is that it does not involve things like dealing with toilets, tenants, mold, bugs, leaking roofs, lawn care, broken furnaces, bursting pipes, and other problems that come with owning a building. Once you buy a vacant land, nothing happens and it behaves itself.
Land has major potential for Gains.
Land is interesting, same goes for real estate like homes but it is quite different. If you buy in an area that is expected to boom or even a home. Chances are, over the next few years that area will be going up in price. However, the difference between land and a house is the cost you paid and the amount you put into it. With a home, you may have to buy for a lot of money and fix it up, sometimes upwards of $30k. Which can actually come straight from your savings. With land, you can usually get quite a good deal if you pick it before a boom. Also, you are putting nothing into it other than some property taxes which are assessed quite low. Even as much as $10.00 annually. So it cost nothing to hold, goes up in value and sells much higher.
Down real estate markets don’t impact land as much.
The fluctuation in a housing market doesn’t have as much as a downside as a home would. Especially if you are riding out a market for a long time, which will impact your upkeep costs and maintenance.
Potential to build and live mortgage free.
If you have the money great, you can hire someone and build a home. And depending on the market value of homes there. It can be much cheaper than say a $700k home. Like California, with such high prices you can build for much cheaper. If you want to live eco friendly or just off grid. You can build a home or cool airbnb for under $10k if done right. Some build aircrete and others put up air stream trailers. If you do amazing landscaping with these type of set ups you can make upwards of $100.00 on AirBnb. See our article on it, for how this works.
You can use Land Equity as a down payment to build your home.
Say your land goes up in value and it is worth enough for you to use as equity for a construction loan. This loan will have a higher interest but it will convert into a mortgage loan after construction. So if you bought land, took this route and the value works out. That can be your first rental for an extra income on a brand new home. Which also sells for more.
In reality, we hardly covered the many reasons land can work out in an investment portfolio. But this gives you the general idea of some of the best perks. See more of our articles at LandZero to learn much more.
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