Investing in land may be the perfect option if you’re searching for a safe and profitable place to put your money. Land is one of the best investments, as it increases in value over time and can be used as collateral if necessary. Many investors choose to buy raw land while it is still inexpensive, then wait until additional houses are built around it before selling it for a much higher price.

Although raw land investments have risks and costs, the rewards can be enormous if the correct decisions are made at the right time. Undeveloped land, in particular, can yield substantial profits if sold to a motivated builder or developer in a high-growth area. You can also earn monthly money by reselling or subdividing your property into rented lots. More property values could increase passive income, allowing you to recoup more of your original investment.

As an investor, you probably think about alternative possibilities for investing your money. Raw land is an excellent investment. It has traditionally increased in value over time, which means it’s pretty likely that your initial investment will expand exponentially over time. Continue reading to learn more about investing in this type of property.

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Land as the Best Investment

Developing Raw Land

A great way to invest in real estate is by purchasing and developing raw land. Vacant or undeveloped parcels tempt entrepreneurs with ideas for multiple project possibilities, ranging from commercial properties such as malls and strip centers to residential housing like condos or townhouses.

The three types of real estate investments include: 

  1. Commercial properties – such as office buildings, malls, schools
  2. Residential homes – single-family houses and apartment complexes
  3. Raw Land – a piece of property in its most natural state

Real Estate Properties in Charlotte NC

How to Invest in Land

There are many methods for investing in land and many ways to invest in residential or commercial property. The following are some of the most effective ways to buy and sell raw land.

1. Developing Raw Land

Some investors buy land, intending to develop it themselves. While this can be lucrative, it can also be time-consuming and expensive. Whether you want to create a commercial or residential property, building from the bottom up, purchasing raw land in a good location, and zoning will undoubtedly be part of the process. Just as there are many investing methods in residential or commercial property, there are many ways to invest in land.

2. Land Flipping

Land flipping is one of the most common land investment strategies, and it simply means purchasing a piece of land at a low price and then selling it for a greater price. Tax sales and foreclosure auctions are wonderful places to look for low-cost land that can be flipped for a profit.

Land flipping can be as simple as purchasing low and selling high, but acquiring the correct entitlements to the property can increase marketability and help you make a lot of money.

3. Buy and Sell With Owner Financing

Selling a piece of land with owner financing is another way to generate a passive income stream while investing in real estate. When a seller carries finance for a buyer, they essentially act as a bank. The buyer makes a down payment and then repays the loan’s remaining balance to the property seller under certain conditions. The property buyer is responsible for the land development, upkeep, and payment of taxes.

4. Buy and Lease

The landowner can lease the land to a third party if the purpose of holding land is to produce a passive income stream, which is monthly residual revenue delivered to the investor. For example, a farmer might pay the landowner a monthly fee and be responsible for the land’s development and upkeep, including taxes.

5. Buy and Hold

Some land investors purchase raw land, intending to hold it for a long time. They may want to develop the area in the future, wait for demand to rise, or keep their land rights, including water, air, and mineral rights. The landowner is responsible for paying annual taxes and maintaining the property as needed while they own it.

Raw Land Investment

How Hard Is It to Buy Raw Land?

While it is risky to buy raw land, it is possible to acquire a loan for undeveloped land. Many traditional banks and mortgage brokers will provide loans customized expressly for raw land acquisitions. However, raw land loans are more hazardous for the lender, necessitating more due diligence on their part. 

When a borrower defaults, the bank typically uses the home as collateral to cover the missed payments. However, there are no homes on bare land, which means the bank is taking on additional risks. As a result, even more than a regular purchaser, the borrower will need to demonstrate they can handle the financing.

Does Raw Land Increase in Value?

With its limited supply and high demand, raw land is categorically and objectively an appreciating asset. In a world where the population is exponentially growing, a finite amount of available land hasn’t been developed, making it an extremely precious resource.

According to the most basic economic theory (supply and demand), the value of raw land will inevitably rise as demand for the finite asset develops. The question is whether the land would appreciate, but rather how much it will appreciate.

Land vs. Residential or Commercial Real Estate Investment

Is It Wise to Invest in Land Now?

With the perks and benefits of investing in land, it remains a top choice of investment to diversify a  portfolio. Land is a precious resource with a high value. If you choose to invest in land, you will find yourself with a rare asset that many other people want to get their hands on, especially if you buy land in a growth region.

Land, like stocks, bonds, mutual funds, and 401Ks, makes sense in specific instances. It can also make a lot more sense (and be a lot more profitable) than any other retirement vehicle if you intend to hold the perfect property for the long term.

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How to Invest in Land  Infographics scaled

How Do I Choose Land to Invest In?

The best real estate agents in Charlotte, NC, recommend buying land based on their intended usage. If the buyer wants to use the land far in the future, they should opt for a location outside the city. People who want to acquire land in integrated townships, on the other hand, have many possibilities.

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Final Thoughts

There is a high demand for land. As our population expands, so does the need for development land. And there’s only so much land to go around, and that alone qualifies it as a fantastic investment.

Investing in land is less competitive than residential or commercial real estate. If you want to establish a business, land is a great place to start. While there are other land investors, there is generally more land than competitors, which means you can find unique bargains if you’re prepared to do further research.

Buying raw land can be a solid investment, even if it isn’t the most glamorous real estate investment. Understanding how land loans work can generate high yields, passive income, and significant profit margins without breaking the bank.

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Charlotte NC Real Estate, invest in land, showcase realty


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