The Land you own should become the goal you want for it to become a reality…
In order to benefit with any Land purchase, you need to have a vision and goal for what you’ll do with the land.
Three simple questions to ask yourself are:
1.) What is your purpose for buying it?
2.) What will you do with the land?
3.) What do you expect to achieve through owning it?
If you buy land with no plans, other than having hope to one day build on it, that’s fine as long as you are making plans for that day and creating a reserve fund for when it will take place. Set aside funds to grow towards that dream date. Set the date. Stick to it. Just as having any goal means to plan ahead and take steps to make it happen.
But if you do nothing other than simply hope, well, it could still pan out to be a blessing when you go to sell it, and it’s definitely better than letting your money just sit in a bank where there’s not much interest worth speaking of. After all, more people would rather buy your land rather than put their money in a bank where it doesn’t do much good for their future. Land has value and it has uses that anyone can benefit from.
Money can be lost or stolen, but no one can steal your land. The only way you could possibly lose the land is if you take a loan out to purchase it but fail to fulfill your obligation to pay what is owed. Although it’s often hard to find a lender or bank to loan on Land, but many investors do, and most investors take necessary precautions to avoid having to take back a property where Seller Financing was offered when they still legally own the land. So, it’s required that the buyer live up to their end of the deal in order to receive the land as agreed upon in writing, once the land is paid in full.
So, what are some reasons people buy land, but it just sits unused?
They may buy at today’s prices rather than wait till later and pay more for what they would like to leave as a legacy for future wealth that a bank cannot provide for their children, grandchildren, or other heirs. Often Land will return greater wealth than whatever a bank can offer with a savings account. Have you ever asked yourself why are so many banks closing their local branches and asking their customers to go online instead? It’s so the banks do not have to pay extra for employees, utilities, leases, etc., and they’re surely not giving much of anything to speak of to their customers either, so they’re trying to find a way to keep more by making online banking seem as if it’s a much better way to do business, rather than receive personalized customer service. Oops, I just got side-tracked on that subject.
The #1 reason people buy land, is that they plan to build a home on it and like what all the area offers.
They may want a place to live away from the crowds, or near a job site.
It may be a short-term investment where they plan to resell in a few years, or months, in order to step up to the next level of investing, and then repeat the process in order to gain momentum in building future wealth more quickly. If this is your goal, please consult with your CPA before jumping into this realm so you’ll understand better what is required when it comes time to file your tax returns, and so you’ll have a better advantage when you know what to expect in this endeavor.
On the other hand, buying land may be a long-term investment (over 2 years), where it’s believed to have future plans for development within the area. Reselling the land years later can sometimes be a better benefit because you waited. Depending on the situation and time spent, along with any holding costs. If the land owner is able to start building once the area becomes what they hoped for then it’s much easier to get a construction loan because they have the land. Last time I checked, every house was built on Land. So, get the land first, then build when you’re able. 😉 Of course, other factors will affect your ability to make your dreams come true, such as employment, health, the economy, family, etc.. Utilities, Building Materials, and other resources are also a necessary part of what is needed to make the goal/dream a reality.
So, the questions to ask yourself is:
1.) Can you see yourself living there?
2.) Do you want a place that is somewhere you can build now, or later?
3.) Is it in an area where you see growth, or a place where you can explore adventures nearby, or where you can enjoy local entertainment? Does the area allow a few recreational activities, such as boating, fishing, hunting, archery, ATV (all terrain vehicle) off roading experiences, hiking, sight-seeing, etc.?
4.) Is it an Off-Grid property you’re wanting to establish, utilizing and experimenting with Alternative Utility sources? This 1st link covers it all https://nogridsurvivalprojects.com/book/, but here are a few other possible solutions to consider too if not going with the standard systems we all grew up knowing about…https://www.diy-solar-heater.com
And, of course, there’s always water haul service to fill your cistern, or hire someone to drill a
well for you if the size of your lot accommodates this option.
5.) Is the land within a metropolitan area that provides everything needed quickly within a few minutes, or do you prefer to be in a suburban area where you can still get to all conveniences within a half hour or so?
6.) Are there any building restrictions that state when you must build by or otherwise? Or are there no building restrictions which allows you more time to consider when you’ll be able to build?
7.) Does the type of home you’re wanting to live in, fit into the area where you will someday build? What is the zoning there? Does it allow for Manufactured homes? Tiny Homes or RV’s or Container Homes? Is there a HOA (Home Owner’s Association) or POA (Property Owner’s Association) which has guidelines on keeping the community in good shape for everyone in it? These are things you can often find out by simply calling the county where the property is located in order to ask these questions.
8.) Are you wanting land where some day you can have horses, goats, and/or other cattle? Maybe you’d like to buy the adjoining neighboring lots to have more space in order to create your own ranch, or ranchette. Sometimes, neighboring lot owners that are not using their land, or able to build on it are often open to selling the land if things changed for them. Plus, you can usually buy their lot at less than market value if not listed with a Realtor. This way, lot by lot, you can enlarge your territory where you want to own and grow. That’s not to say every neighbor will be so willing, but it never hurts to ask. Just be sure to let them know that when they are ready to sell that they’ll have a built-in buyer next door.
9.) Do you want to buy the land so that you can build more than 1 home on it, in order to rent out one and live in the other? Maybe you’d like a place where family and friends can visit in a guest house or casita. Maybe you want to use one of those as an AirBnB, or lease out a unit. Maybe even place another home on the same lot to help pay for your own. If it’s zoned for Multifamily homes, then a duplex, triplex, four-plex or maybe even more can be built to help grow your portfolio of rental units, depending on the size of the lot and county allowances.
10.) Perhaps you’re wanting a 2nd home location where you can leave to avoid harsh winters, or to avoid the summer heat if that is where your primary home is. How nice it is to have a 2nd home where you can venture off to, to enjoy a place opposite of the temperatures you want to get away from without the high costs of hotel stays and other travel expenses, and without having to sell your home to do so.
Lastly, some people just want a place to retire to, and that time has not yet come. So make sure if this is you, that you store up for the future you want to come.
Nevertheless, if you don’t have a plan up front then it’s kind of like waiting for your ship to come in at the airport. In other words, it’s up to you to make your goal happen.
With Real Estate demand so high, interest rates low yet growing, and inflation that seems
to have no end in sight as it continues rising daily, then it stands to reason that buying land
where you can start to build your own future wealth is one of the safest moves you can
make today, as well as always. Of course price depends on location and other factors too.
No matter what, land is a safer and smarter investment than putting your money in a bank savings at much less than 1% interest, or in the stock market which is a real gamble. When you take time to get answers that you need to know about the land, the area, and what the county and state requirements are that the land is in, this will give you the assurance as to whether or not the parcel of land is right for you and your plans for it in the future.
If there is no time limit to build, then there’s no need to rush into building right away either, which allows you to do things at your leisure through time and as your finances allow you to continue moving forward, one step at a time, or as fast as you want if you want. There are always construction loans you can get, which most Credit Unions are your best bet for that. However, in order to get a construction loan, you need the land, so that's step one. Get the land first. 😉
Although some people have become wealthy investing in the stock market but way too many have lost an awful lot. It's a known fact that practically all wealthy people who have become rich mostly did so through investing in Real Estate. And many of those own land elsewhere as well. Don't believe me? Just Google "Bill Gates Land Ownership", or "Jeff Bezos Land Ownership", or any other wealthy well known investor.
Investing in the stock market is a much higher risk which is fine if you have money to burn since it won’t matter if you lose or not then. That’s not to say that land is a guarantee your investment in land will grow "IF" you overpaid for the land to begin with. There are a multitude of ways to value land so you can determine whether it’s a good price at the time you're buying it. Don’t overlook this important tip. If you need help with figuring that just let me know.
As long as you buy at a price that is right “for you”, and you see the value in it, then the land will do more than grow in value over time; it can serve as the door to a much better future because you invested in something which will help to build what you’re looking to create. Whether it’s a home you want to live in, or the fact that your money is growing much better than any bank can ever provide, investing in land gives you much more through time in order to move up into the life you’d like to have. And, that’s real truth you can bank on. 😉
By the way, if you’re utilizing Seller Financing then be sure it’s something you can invest in safely throughout time which makes sense. Not all investors are alike when it comes to selling their own land, so consider all fees factored into the total end cost after all is said and done, which needs to be well laid out in writing within your Agreement.
Those other fees can include things like property taxes, HOA or POA fees if applicable, servicing providers, billing/ accounting, recording, documents, holding fees, and any other costs estimated over time which would be factored into the monthly payment.
Of course, Cash is always best without all the extra costs, and it’s more immediate allowing for a quick close and transfer of the property Deed as required by law. To me, this is such an easier way to understand exactly what you’re getting and paying for rather than having to do the math, and for far less. After all, who really likes Algebra, right? LOL.