For any investor, a high ROI is always the goal. Investing in real estate is common for many investors around the world interested in owning developed properties such as homes, businesses, or apartments. But what about investing in wide-open space and undeveloped land? Here are five reasons why investing in land instead of developed home properties is a smart investment over time.
You Get Your Money’s Worth
With raw land, you can get much more income or profit in comparison with a developed lot. Undeveloped land can be bought for less than market value and eventually be sold for much more than originally purchased. Since there’s nothing built, there’s no need to worry about maintenance, mortgage, or any other bills that come with purchasing a developed lot. With land becoming more and more valuable as time goes by, buying and holding land can increase profit in the long run. It’s a smarter investment with the potential for high ROI.
Supply and Demand
Another reason to invest in land is that there is a demand that cannot be adequately supplied. There will always be only a finite amount of land available no matter where you go, meaning that there will always be a demand that cannot be filled. As a city grows, so does the demand for land, which increases value. Purchasing a piece of a limited supply only ensures that you get more bang for your buck when everyone wants a piece.
More Land, Less Competition
Most investors are more concerned with flipping developed properties such as residential and commercial real estate, instead of land. This creates more opportunity and availability in the land market, creating a lot less competition on lots. With more land than competitors, a good deal is almost always achievable for any investor. With no mortgage or tenants to deal with, purchasing land is good for profits and less stressful on you. Everyone wins!
Since land is undeveloped, it is often sold below market value. There are many different ways investors can buy land—from auctions to websites to the government to other investors independently selling land. There are plenty of places to find the best deal on land. Most land lots can be purchased with cash and without having to deal with a bank. Less headaches, more profit!
Land Isn’t Going Anywhere
When other markets come and go, land will always be there. No matter what happens in an economy, either good or bad, people are always looking to sell or buy land. Since the number of land lots won’t ever increase, land will always be in demand and is more recession-proof than other investments as it is essential. You can’t build a home or a business without land for it to stand on. In times of recession, land can be bought for cheap and increase in value once the economy recovers.
No matter the property, investing comes with varying degrees of risk. However, with patience, research, and dedication, an investor can make a sizable profit without the typical hassles of maintenance, banks, and tenants. With less hassle to worry about, you can put more focus on selling and achieving prosperity as a land investor.