Buying land online is a unique opportunity, but first, picture yourself for a minute. It's 1950, you and your family are living in Wisconsin and you tell them "We own land in Florida now by the way, I just bought it a few minutes ago". But wait, you didn't even go to Florida what are you talking about? Fast forward to today and now that exact same scenario is possible.
It's amazing how far things have advanced since then, internet and computers have far surpassed what people expected. Personally for me, one of the most remarkable technologies on the internet today is Google Earth. If you have never used it, check it out, travel the earth from your laptop for a good hour. I mean it! Pick a random place on earth, zoom in closely and drop the street view icon anywhere on a street. You will find yourself walking the street as if you were there. You'll see the local shops, homes, people, cars and can stroll around the whole town in a neighborhood you have never even heard of. I love technology so I can tell you this will be viewed in virtual reality one day, it's inevitable, but I digress. I'll keep on the subject matter before I get really tech nerdy here.
Historically, buying land was only subject to a massive and costly process before the internet. You would be driving around for hours, possibly paying for a hotel, having an agent take you places and sitting at a desk for around a month giving offers and doing paperwork. The fact that you can buy land online within minutes is remarkable and it has opened up a new group of investors.
The Pros of Buying Land Online
1. Finding Diamonds in the Rough
I can tell you first hand we have sold properties over the years in the ranges of $2k to $8k dollars that are now worth as high as $50k in a few years. They purchased them online, from us, from their home and in within minutes. Even land bought for $3k and sold for $10k in a few years are better returns than most other investments.
Two parcels we sold here at LandZero still haunt me, strictly because two specific customers passed on them for such a minor thing as weeds on the road. One person even drove to see the parcels and because he couldn't drive the road yet he quit. This is land mind you, you are supposed to work on it or it's going to remain as land. Issue is, with the value of those properties now those customer are priced out of that area for good, believe me, the whole area skyrocketed. They had the opportunity of a lifetime a click away unfortunately. Personally, that would bum me out and I actually know the feeling, it doesn't feel good and it haunts you for ages.
Land purchasable online is best in the ranges of $1k to $30k or so, if you are looking for $100k to $200k land it's pretty important you see it. Also, more than likely someone selling that land that high won't be doing it online.
Given we stay in the range of $1k to $30k you should know, you are limited to find another country like the United States that still has land in this range. It might not last forever, not because Bill Gates is buying all of it, but because they aren't making it anymore and supply and demand always wins.
With all the land available at the click of the button, there are obviously more of these deals to be had. If you're interested in land as an investment, you found a small niche that has opportunity others have yet to see. On top of that, if you are buying land online, you found another niche many investors are missing out on.
Not all properties are built equally, some may not have the big return on investment but they still serve a purpose. It's always perfect for someone, something like remote property looks bad to some but other people seek those out. There is a market for all types of land and I will touch on that later.
It's frustrating to buy a property and realizes it doesn't meet the goals you had intended. But land isn't something manufactured as a product, it is what it is, a clean slate of dirt on the earth. The issue often times is the county, maybe they don't allow what you wanted for the land, that's why it's best to call and ask questions first. There are people who look for distressed properties or remote land for long term value, even with the goal of improving it for immediate value. If you want something turnkey with paved roads, power, sewer, water, surveys done and the whole works it will just normally cost more, they are out there. However, if you are looking for something more raw, lower cost and freedom to mold it, those are out there as well.
All the info and tools to research land sold online are all available now. This is your investors journey, seek out what you want and like anything else you buy, do some research. Make sure it works for your goals, there are many to pick from and massive opportunities are to be had. Think of what those needs are for you, be patient and seek it out. Even if you lose that diamond in the rough the first few times.
2. The Savings are Real
Land transfers and deeds can be complicated, but site like ours at LandZero can close in house, for free to you, and it takes years to learn how to do this. That's a big perk when buying online, you will not get that opportunity going though a real estate agent.
Agents on average will add to the cost you see. Say you see a property for $5k on Zillow, you could end up paying up to $8k when all is said and done. The seller will often want the asking price they put, but someone has to pay the agents fees and closing costs. Closing with and agent is costly, an agent doesn't actually technically close, that takes years to learn. They need lawyers to draft deeds, title companies for research, filing clerks for recordings and more. All this cost for others passes to you and the agent wants a cut too.
I have yet to see an agent that doesn't have a minimum, usually in the $1500 range. That's a big percentage and like I said, it takes years to learn how to close. When buying land online the company should know how to self close in house, some do charge a small amount for this though called a doc fee but it's still less than an agent. When picking a website to buy land from, knowing the closing process is a crucial part of the potential savings.
We research probably 90% more land than we buy, this takes days to do. We have to research on average 80 to 300 properties a month when we are in buying mode. Buying land online could be from a company or person, like a broker. Finding a company or broker that knows land and holds inventory you like is a good perk for investing. This happens with homes as well, large real estate buyers have the pockets but often times it's their agent finding the properties they know they would like to buy. Find a good place to buy land from with fair prices and rates but always research the property as well because it's your investment.
Savings wise, as a land company we have the connections and cash to buy in bulk. Yes, It is a huge upfront cost for us, many don't have that amount or want to spend that much on land. However, with this process it often allows companies like ours to sell below individual peoples asking prices. It passes on savings to you, the customer. Deals like this are usually only found through an online land company doing the same process. Whereas, an average land owner who has held some land in the family will usually want full price for his land.
I won't go into much detail on this issue because it's obviously a major perk of buying land online. Which is, having the option to make monthly payments on land, it's highly under rated. Before you needed a bank loan, good credit and the risk of ruining your credit should you miss payments. A bank loan is a lot more risky than a company who gives no credit check loans. Banks have option to attack your credit score should you go though troubles and default. Wrecking your credit score will haunt you, you will have no options for credit cards, car loans or home loans if you ruin it. When you're young you may not think much of it, but you will regret it eventually. Overall, even if you plan on paying it off, things can happen, at least you don't have that hanging over your head when buying land online.
3. You Have the Tools Now to Invest in Property Online
As we talked about above, Google Earth changed the landscape of land investing. Sure, with a home you need to tour the inside but with land most everything is visible from above. The amazing technology of Google Earth's satellites and street views make this all possible.
Say you see a parcel of land you like, type in the GPS cords of the property into google earth. The company should provide this, if it is an addressed lot, you can simply use the address provided. Once you found the parcel you picked, you put on your detective hat. Is it shaped how you want, how far from the town, what do the roads look like, is the area growing, do I see power poles, are there cool attractions nearby and more. Depending on what you are looking for in buying land, you can pretty much figure everything out while sitting at your desk.
For the fine details, county websites are useful too, pretty much every county has what is called a GIS system. You can easily find this by googling, for example "Cook County GIS System". From there you can see parcel boundaries, annual property taxes, previous sales, zoning, parcel size and so much more. Say you want to build something like a remote storage unit or find camping land, call the county directly and ask for the building department to make sure you can do it. They can answer every question you have perfectly. You can do all this research in about an hour to feel comfortable in your purchase.
The Cons of Buying Land Online
I should first note, these can all be avoided easily but still are the common pitfalls of buying land online, especially for a novice investor. So really, all it takes is some skill, due diligence and time on your part.
1. Buying Land Without Knowing All the Details
The truth is, this can be easily avoided, all the tools are available to make sure the land you buy works for you. As we talked about, you can see most everything from Google Earth and you can see all the details on the county website. But there is more you can do to narrow down a property flawlessly before buying. Land selling websites put only verified information usually, it's vague, they often don't go into details and if they do you should verify them. Website for buying land are selling the land to anyone, they don't know your personal goals for it. Any information you want should be verified directly from the horses mouth, that is, the county and the building department, not the seller.
Any land in its current state, regardless of how bad or good, has value to someone. Even land in its absolute worst state, swamp land for example, people buy these on purpose for a reason. You will see all sorts of land for sale, some better than others but not everyone is looking for what you're looking for in land.
I'm going to surprise you with some examples of really "toxic land" that still has uses. Granted it may not be for you, but you could have avoided it before you bought it. One example, there are lots of land for sale that are 6ft wide by 50ft long, you can't build or really do anything with it and I've seen a lot of these. I learned a new strategy researching this deal, after buying these they send letters to connecting properties with selling offers. This is because those parcels often times act as road access for someones parcel. They pretty much need it and would double their value if they bought it. They just didn't know it was for sale.
Some more examples are swamp land, forest land, unbuildable land, flood zoned land, very slopped land, tiny parcels, extremely remote desert land. These might sound bad to you but they are actually sought out by others. I'll be quick, swamp land can be hunting permitted, forest land for lumber or conservation tax breaks, unbuildable land can be bought cheap and rezoned, some flood zoned land can be elevated and built on, really remote desert used for storage space, shooting ranges and off grid living, slopped land can be improved with a retaining wall for big returns and views, tiny parcels used for cell towers for monthly profits. Hopefully you can see what I mean. I have endless stories of creative people that profited on what you might of thought is "toxic land". You can get creative and search niche properties like this out or find fully ready turnkey ones for building as well.
It should be noted, a real estate agent will NOT save you from doing your own research. You need to make sure what you are buying fits your goals and verify anything you see as you are the buyer. Even an agent doesn't always know everything about a property, they may even be wrong about some of the details. There isn't a contract that says "every detail a real estate agent told you is 100% verified and guaranteed or your money back". So if you are worried about buying online vs. buying using an agent, you're really in the same position either way. An agent can act as a guide with experience and help you research, especially in the farm land industry but verify everything.
Also, if you're worried about buying it and not seeing it first, offer someone on craigslist $80 to go take 50 pictures and tell you everything about it. It's simple and we do it all the time, we post a gig like this and get several responses in minutes, even from people that take these jobs all the time. It's pretty awesome, they often call us when they are there and tell us everything. Then they send us a huge set of pictures and we cash app them the money.
2. Picking the Wrong Company, Person or Terms of Payment
Regardless of buying from a company online or a private seller you don't want to overspend. Picking terms and paying monthly are a huge perk, some need to balance a budget and this is a great option to invest. The issue is unfair terms, we have seen it before. Massive APRs and far out terms, after all they gave you the loan without a credit check so there's often a premium to pay for that.
Picking a 10% apr on a 20 year term for land is pretty common. $30k for some really nice land is not so bad. Let's say you picked a beautiful $30k ranch parcel and the terms available are $289.51 a month. That sounds pretty cheap to own that and you can pass it down, cool deal. Now let's add that 10% apr in for those 20 years. The cost of credit, meaning the interest you will pay alone on that loan for land is $39,482, that's more than the cost of the land. The lands total price you will pay is now $69,482 after all is said and done. That's quite a bit but if it's your only option to own it's not much different than buying a home on mortgage. Still, choose your company and terms just as wisely as you do your land. It can be quite worth it to buckle down and pay it off quicker.
3. Missing Out On the Opportunity of a Lifetime
We sold some great land in Hawaii years ago for very cheap, no HOA dues, private area and next to a beautiful monk monastery. They sold in a few days with probably 20+ interested customers emailing and calling us, it was a very busy week. Any one of these people could have bought it at the click of a button, $7k for land in Hawaii and all these people hesitated, it seems weird now and good luck ever seeing that price again.
The opportunity for those customers being able to buy land in Hawaii for $7k at the click of a button was very good. Two smart people clicked the button and bought it, the others waited way too long and shortly after called us devastated it sold already. This is the joy of buying land online, you're up against a lot of people looking at it too.
Due diligence is good, don't ever skip that but do you truly realize how many people are online looking for land. It's one thing to see a for sale sign up in your neighborhood, but there are estimated to be 5 billion people online daily. I can tell you, our website LandZero alone was close to 1 million visitors in our first 3 years. We don't even advertise much, very little in fact, there is just a lot of people looking at real estate online all the time.
Overall you're up against a big market of buyers, I have seen absolute jewels online and they are gone the same day. We even have bought some this way and we'll usually end up buying it in 30 minutes when we see something rare. Learning good due diligence and making a checklist can help out, when you find those perfect deals just remember others are looking at it too.
It's important, if you're new to land take your time researching it and if you miss one you'll get the next one. Just be aware, it is a con because you can't negotiate and could end up seeing it sold the next day. It's pretty common, we have had several properties that sold the day after we list it. Sharpen your skills and find your opportunity when it comes up.
We hope your land investing journey becomes fruitful, we really believe in this niche, real estate is a proven wealth builder and land is still underrated. Thanks for reading and I hope this article helps guide you in finding that perfect parcel of land.