Purchasing and investing in land can seem like a pretty solid business strategy, no pun intended. After all, unless there is a plate-shifting earthquake, it isn’t going anywhere any time soon and people are always going to need it. But turning a profit isn’t as simple as making a land-grab and waiting for someone else to come along and want to use it. You need to have an eye for good land with a good potential for investment opportunities.
To help you get pointed in the right direction when it comes to land investing, check out this list of basic dos and don’ts you should know from the start:
- DO study the history of the region and all aspects of its incomes. You are going to need to know about employment and population trends, the average household income, typical upkeep for land of similar quality in the area, and so on. Research is your best friend in land investments.
- DO buy land in healthy, primary markets if you are tentative about starting projects in out-of-the-law areas. Land near or in the center of a populace has a much higher chance of demand.
- DO think about utility and flexibility early. If you want to develop the land into a structure, you have to think about how it will be helpful to more than just your target demographic. For example, if you want to build a large department store for one client on your land, will that have any value if that store closes shop a few years later?
- DO talk to the owners of adjacent lots to see if they have struck up any deals with the bank or past tenants about how it can be used. You can also ask them about the relative safety of the area if you are concerned of criminal activity.
- DO get a title report before completing any purchases. Is the owner selling you the plot of land actually the owner? Are there liens on the property that will obstruct your investment plans?
- DON’T build without planning your utilities completely. Water, electricity, gas, and even whether or not cell coverage is available should all be considered before you start your project.
- DON’T assume there is a sewer underneath your feet just because you see a working toilet. Find out early on if the land uses or needs a septic tank. This can literally be a nasty surprise if you don’t consider sewage drainage upfront.
- DON’T get too isolated from the beaten path. It is nice to be able to find a quiet corner of the earth to relax or meditate, but potential renters or tenants might not appreciate having to travel across bumpy dirt roads to get to your land.
- DON’T forget the control you have over the situation. If you are purchasing land, the price can probably come down with successful negotiations. If you are selling land you invested in, you can prepare ahead of negotiations to prove why your property is deserving of the price you set.
When everything is said and done, it is no secret that buying and investing in land is a complicated process with risks and rewards. At Schern Richardson Finter Decker, our Phoenix real estate attorneys can help you navigate the trail ahead towards the success you deserve. We are well-versed in land use laws, boundary disputes, eminent domain, zoning regulations, and so much more. We are also familiar with business law and construction law, two practices that often accompany real estate law cases. For more information about our services, contact us online today.