When it comes to making a great profit, few things beat the prospect of buying vacant land and selling it for more – if you know how, that is. As profitable as it might be, acquiring and selling land isn’t a walk in the park – but it’s still a possibility for quite a lot of people.
If you’ve got the initial monies necessary for making an investment in land, you could very possibly be well on your way to becoming a successful land investor – that is, someone who makes money by putting money into land, and turning a profit out of it.
However, if you’re really planning to get into the business, you’ll have to be aware of the risks – and the potential.
Know Where to Find the Right Seller
There are two kinds of land sellers. There are those that professionally make money off of buying and selling land, and then there are heritage owners, who simply have a parcel of land with no real value to them or any sort of emotional connection, and really just want it out of their hands in exchange for cash – something they can actually work with.
You want to work with the latter. These are people who will sell their land for cheap, if they can get a quick and legitimate deal. The former, however, are making money – and they’ll make their money, especially if they’re highly experienced in the process. The best way to get in contact with a buyer who just wants to sell their property is by avoiding agencies, and going straight into directories. A buying and selling land or property isn’t uncommon online, especially now that so many people are going to sites like DDProperty to get their real estate and properties sold.
Utilize the Internet to its Full Potential
Head online, and you might stumble on a gold mine. The Internet is saturated with great deals – however, it also comes with its fair share of bad deals. It’s all a matter of weeding out that isn’t worth it, and finding what is worth it. Using the information owners are making public, you can use different online tools to determine what the approximate value of a land might be, in order to figure out whether or not you’re looking at a decent deal.
Buying land is also a very relaxed process, especially online. Most people are looking for houses, townhouses, apartments and condos. These are all things wherein the value of the property is immediately apparent, and it’s easily understood why. Land, however, is more complex. For all intents and purposes, it just sits there. If no one does anything with it and pumps no money into it, then it won’t actually get any more expensive, will it?
It will – if you know where to buy. For one, urban areas are constantly increasing. As industries grow – especially in developing countries, like Thailand – more and more companies are also looking for land to buy for the construction of factories and the manufacturing of more products. Alternatively, with soybeans being the country’s largest export commodity as the Food and Agriculture Organization of the UN notes, you could also sell your land into the agriculture business. For soy, Michigan State University recommends a soil pH of 5.8 to 6.4 – close to neutral.
If you buy the right land, the area around it will become more and more valuable – and thus, the land itself will increase in value.
Remember, this isn’t (in most cases) a strategy wherein you can buy land, and sell it for twice as much five years later. You may be holding onto your land for decades before you see a great increase in value. Once you do, however, you can get the capital needed to make cash buys. Buying land with cash can get you greater discounts than through loans or other similar payment terms, and the reason is simple.
Sellers are more comfortable with total cash upfront than a larger amount paid over the course of a decade. If you demand a low enough price, you can then sell the property for a higher price through such payment terms. Then, it becomes a matter of hedging your bets, buying enough land and selling it on terms that, even if one or two deals fall through, you’ll end up making a profit in the end.
Remember, Land Buyers Aren’t Homeowners
Once you’ve got your hands on your land, selling it is where the tricky business comes into play. Homeowners see a house, and want to live in it. Subsequently, they picture themselves that way. They see the kitchen, and see themselves cooking in it. They see the living room, and imagine a party with friends.
Land buyers don’t see that. They don’t usually buy with their heart or gut – they’re making calculated decisions that net them long-term profits. Land buyers either buy land to invest in it in the long-term, or to build on it. To persuade a land buyer to take your property off your hands, you need to know what they’re looking for. In that case, it depends.
People looking to construct a home might be looking for pre-existing utilities, land without zoning restrictions or a moratorium preventing the building of housing or businesses, or land with the right pH for crops and livestock.
Choose the Right Land
That’s where choosing the right land heavily comes into play. Land away from busy highways or loud railways, and nearby an available and existing grid of power and water is good for housing – land with existing developed infrastructure is even better.
If there is no infrastructure, you can appeal to buyers looking for land to build self-sustainable housing on, through rain filtration systems and alternative energy. On the other hand, an environmental survey can get you a list of possible contaminants, soil percolation and acidity levels to help with buyers who are looking to use the land for agriculture.
No matter what, however, land will always be a good investment in the long-term. After all, they don’t make as much of it anymore, and even if you get a cheap piece of land with horrid topography, as long as it’s still fertile it could be turned into a profit by someone looking for it.