When some people think about buying land, they just think of a big, empty area. But land investing is way more detailed than that, which is good news because it gives you, even more, exit strategies. When you’re thinking about investing in land, here are 4 types of popular land investments and how to evaluate them.
Land investment is different than a land with a dwelling on it. Houses, apartments, mobile home parks, or any real estate buildings. Rely on 2 factors to increase the value of the property. And those 2 factors are:
1- The amount of rent the real estate is generating. In houses or residential real estate. Is only one unit or 3-4 units. For commercials like apartments, shopping centers, etc..
2- The ARV (After repair value) for improving the property. Example for flipping houses.
In lands investments on the other hand. It rely on the developments that coming near by the land. To get the most bang for your buck in land investment. Or to hit the jackpot. Look for lands where you’re certain that developments are coming near by.
4 Types Of Popular Land Investments And How To Evaluate Them
#1. Infills
These small properties exist in town and are often an undeveloped piece of land in the middle of a suburban area, such as the Pensacola_32501 or other areas. When looking at these properties, consider how easy it is to build and whether the area is in a desirable location. Infills can be a fast, simple way to make money on building if you can build affordable and sell quickly.
We had in the past few in Pensacola, some areas changed completely. Like Pensacola downtown. Houses and lands went from really cheap to the most expensive real estate in Pensacola within the last 20 years.
#2. Subdivision Development
These tracts of land can be quite large and hold the promise of building a subdivision of houses. When evaluating this land, make sure that city services can be affordably extended to the area, and city bylaws allow you to subdivide the land. Some large subdivision developments around the country have stalled because city services couldn’t affordably be extended to the land.
In this case, you need to contact the department responsible for developments in your city, IN our case here in Pensacola, that would be the city haul. Or if the land investment in the county, you need to contact the development department for the county.
Just follow our guide here when you find one of the popular land investments in your area.
#3. Commercial Development
Raw land can be turned into a warehouse, factory, storage facility, shopping space – even a restaurant, mechanic shop, or doctor’s office. When evaluating the potential of commercial development land, consider whether your preferred development will work on that land. For example, if you plan to build a shopping mall, is there road access and shoppers who live nearby?
#4. Recreation
Not all land needs to be developed. You may choose to acquire land and instead of seeking out a financial ROI, you may want to invest in land and hold it… but use the land for your enjoyment. This is a legitimate and very common reason to invest. When evaluating this type of land, ask yourself whether you’ll be allowed to build a cabin or hunt and fish on this land and whether it’s safe to allow others to do so too.
Summary
These aren’t the only ways to invest in land but these are 4 types of popular land investments and how to evaluate them so you can build a portfolio of profitable land investments. Start here and grow from here!
Are you ready to acquire more land or maybe you just want to see what land investments are available to consider how you might invest? Get in touch with us to see our list of available land investments. You can call us at 850-861-1326 or click here now and fill out the form and we’ll get you access to our list of land investments.