Investing in Land
Are you looking for an investment opportunity? There are numerous ways to invest your money. However, many of these options require you to maintain a property. If you’re looking to invest, you should look into a land investment, one like the properties at Venture West Ranches. Whether you decide to sell the land or maintain it for farmland, you’ll end up having a real possibility of making money without much work on your end.
Read on to learn the seven big reasons to start investing in land.
1. There’s Not Much Land Left
And that’s not necessarily a bad thing. Supply and demand work in a lot of industries. The same concept can apply when you’re investing in land. With the world population continuing to grow, it is a pretty good bet that land values will increase. It’s a resource that’s actually quite limited. Unlike other investments, people are always going to need to purchase land. Depending on how long you own the land, you can end up selling your investment for cash or rolling it into another purchase.
2. Investing in Land is Inexpensive
Out of all of the investment opportunities out there, investing in land can by far be the cheapest. Imagine if you purchased an apartment complex or rental home. You’d be responsible for keeping up maintenance on these properties. All of that maintenance adds up. When you invest in raw land, there’s potentially very little upkeep required. You don’t have to worry about any buildings or repairs. The only costs you’ll need to consider are the property taxes (which in some places could be extremely cheap), and possibly property insurance. Without the added costs that another investment may require, you could end up making more money in the long run.
3. You Don’t Have to Do Anything
Owning a rental property or other investment property requires you to be present, or hire someone else to take care of your properties. You’re expected to keep up with repairs, handle tenants, and collect rent. When you invest in raw land, you’ll never have to worry about those issues. The great thing about investing in land is that you can literally do nothing when you’re the owner. It doesn’t require any type of maintenance or knowledge of building. You won’t have to worry about making sure the building structure is suitable for tenants. As long as the property is useful to potential buyers, you have very little to worry about.
4. There’s Zero Competition
When you’re looking to invest in other properties, you may compete against more potential buyers. The competition can be high for properties like homes and commercial properties. But when you’re investing in land, this might not be the case. Most investors aren’t aware of some of the benefits of land investing. Not as many people will be budging you in line to get the highest bid. You’ll be able to look at the land property without wondering whether or not someone else is potentially purchasing it from under your feet. This, of course, depends on the property but in general, there are fewer numbers of buyers for land, ranches, and farms.
5. Use Lower Startup Capital
One of the hardest parts of being an investor is working with banks. In order to purchase most properties, you’re required to secure a mortgage loan from a lender. When you’re investing in land, this isn’t the case. In fact, you can purchase land with any savings in cash you have stashed away. Take a look in your area to see what the prices of land are going for. You’d be surprised the amount of land you can purchase with just a few thousand dollars. Many times you will find ag lenders or can use owner financing.
The price for the land you are purchasing will depend on what you plan to use the land for and the income you can derive from it. Are you wanting to rent the land out to a farmer to farm? Make sure you agree to a detailed plan of what will be farmed and how the land will be maintained to be productive. It’s best to decide first what you’re going to do with the land before you look for cheaper prices. However, there are deals out there if you know what you’re looking for! This is where the entrepreneur can see a use that the present owner does not. Many times by adding additional revenue streams the new owner can turn land into a nice investment with a very good return.
6. You Can Buy Without Seeing
Land is a great investment for those individuals who aren’t looking for a property they’ll need to physically look at. This is a convenient way to purchase property across the country. Know what your parameters and characteristics you are looking for and find land that fits. Thanks to the internet, you’re able to view properties online should you need to. You won’t have to travel to the location itself to inspect anything because there may not be buildings or physical properties that need to be inspected.When doing this, the most important thing is doing the proper research. As long as you’re researching the property and the surrounding area’s market, you might be able to purchase land without stepping on the property itself.
7. Utilize Seller Financing
One of the best benefits of land investments is the ability to incorporate seller financing into the sale of your land. This is known as passive income because you’re not required to do anything while still making money from the buyer. Plus, many buyers will take advantage of this option because securing financing from a bank can be difficult.
How does seller financing work? Essentially, you’re cutting out the middleman when you choose to finance the buyer. You’re able to get a return on your investment and if the buyer defaults you take back the land. The buyer, instead of paying the mortgage off via a bank, will pay you directly. They ultimately own the property, but they will pay you off as they would the bank. The great thing about this setup is you can charge financing fees or late payments just as a bank would and of course take it back if not paid.
Your next investment opportunity may be right under your nose. While other real estate investors are looking at commercial properties and the like, you can focus on one of the hidden treasures of investment properties. Investing in land holds plenty of benefits that are often overlooked by other investors. As an investor, you’re able to purchase something that’s high in demand and scarce in supply. You can incorporate seller financing to take advantage of not having to go to a bank. Plus, if you’re not sure you can finance the investment through the bank, you’re able to purchase property with your own savings in cash.
Are you interested in investing in land? Not sure where to start? Not a problem!
Venture West Ranches is here to help you through this significant time in your life. Contact us today to see how we can help you purchase your first piece of land.
About the Author
Partner at Venture West Ranches
Buzz Tatom is a ranch owner that has built, run, and sold numerous businesses in his career. This gives him a unique background in helping Montana farmers and ranchers navigate the life decisions that we all have to face. Whether it is passing a ranch on to the next generation or planning for eventual sale, his talents and contacts help save clients money and navigate complicated transactions.