“I told you it would work,” my partner told me triumphantly.
We had just closed our first deal and walked away with a 200% return on our equity.
Of the two of us, I had been the skeptic.
But not anymore.
From that first deal on, our returns only got better.
Despite my initial reservations, we had found that vacant land can be highly profitable.
Of course, you have to treat it as a business and acquire properties at the right price.
But if you have my same initial reservations, you should read on to find out why land investing is a great opportunity.
And without further ado, below are five reasons why you should think about investing in land yourself.
1. High Returns:
Most of us know that real estate can be a great vehicle to expand your wealth, but we don’t generally think of land when we think of real estate.
This is a mistake.
In our business, we are able to make a 300-600% return on our equity on every deal.
Of course, you do need to understand how to find inexpensive land, complete proper due diligence, and limit your risk.
Still, there’s no arguing it can be lucrative.
2. Low Cost:
As you may guess, vacant land is going to be much cheaper to buy than land with any kind of improvement on it.
The price point of land varies dramatically – some parcels cost less than $1000 others go for millions.
But in many cases, you can buy raw land for under $10,000.
This means that you don’t need much-starting capital to begin investing in land.
With low price points, land is more accessible than other forms of real estate.
3. Few Carrying Costs:
Another great thing about land is that it is also affordable to hang on to.
There are few maintenance requirements unless you are looking to improve the lot and maintain these improvements yourself.
Typically, you will just need to pay property taxes, and these can be very low.
Low carrying costs mean that, even in a worst–case scenario, you won’t be spending much money to hold on to the land.
4. The Risk Is Low:
I know this comes as a surprise, but the risk can be low with land investing.
As with any investment, the actual risk to you depends on how knowledgeable you are about the asset.
And in the case of land, you have to do proper due diligence and also buy at the right price.
Still, if you don’t spend more than $10,000 on any one parcel, you know that you aren’t risking too much capital on any single deal.
5. Little Competition:
Because land is not a popular asset type, there are not many land investors out there.
This is unlikely to change anytime soon since most real estate investors are trying to buy residential or commercial properties.
And it is easy to use this to your advantage.
When others are missing an opportunity, that’s usually a great time to invest.
There are a number of reasons why I went from skeptic to full-time investor – but the primary reason is that land investing works!
And it’s worth considering it for yourself!
Author: Erika Benson, Co-founder at Gokce Capital
I am an architect by training and a former Affordable Housing Director for the City of New York turned full-time Land Investor. I used to help New Yorkers find affordable housing, now I help people around the US find affordable land!
I keep an active blog on my company website where I give advice on buying and selling land. I also have a YouTube channel with over 250 videos that provide tips for land buyers and information on our properties. Please check out my website to see more information on how you can sell your land.