Ever wondered if you should buy vacant land? This could be something you’ve never really considered. While not normally seen as an income producer on it’s own, land can be a very simple way to build your real estate portfolio. Land has the potential to earn equal or even greater passive income without demanding all the time and attention of other investment ventures. Or, if you’re not so much looking to buy and sell land, but thinking of a solid, long-term investment that you can use as it appreciates, vacant land works that as well. In this post, we share our Top 5 Reasons to Buy Vacant Land in Arizona.
1) It’s A Safe Investment
One reason you may want to buy vacant land in Arizona is the inherent permanent nature of real estate. Unlike stocks, which can virtually disintegrate before your very eyes, land isn’t going anywhere. Additionally, it is well established that real estate gains in value over the long term, even should you decide to do nothing with the property. By merely holding a wisely selected parcel of land over the long term, you can still end up making a tidy profit when it is time to enforce your exit strategy.
2) It’s A Limited Resource
As the old saying goes, “they’re not making any more of it,” which makes land an in-demand resource. And by understanding the importance of supply as opposed to demand, it makes perfect sense to buy vacant land in Arizona. Location in real estate is an extremely important factor in the value. For this reason, you’ll want to ensure that you purchase in the right location. Be certain to do your homework into local ordinances, zoning, local, state, and federal guidelines as well as any environmental restrictions. In this way, you’ll be certain that there are no problems that could prevent the land from meeting the needs you may have for the property. One creative strategy investors of larger parcels use to quickly increase land value and profit is by subdividing, in essence creating new parcels to sell.
3) Seller Financing
One of the biggest perks of buying vacant land in Arizona is the potential to sell the land at a higher price. You can in essence “speed up” building equity in the property by offering to finance buyers. You set the sales price and can sell the land at a higher sales price, because you’re essentially “holding” the property today for the buyers, risking taking a loss should the value rise at a greater rate than you estimate. Additionally, you can earn interest. Should the buyer be unable to purchase the land at the end of your agreed upon term, you’ll keep any deposit and monies earned, as well as the property.
4) The Overall Potential
There is a great potential to profit when you buy vacant land in Arizona. By carefully planning your long- and short-term goals before purchasing the land, you can earn income from several methods. The relative simplicity of just holding the land requires little to no time on a daily or even weekly basis. Should you decide to purchase land for business purposes, the land will more than pay for any management team and any other costs to oversee the project. Your income from real estate can be as passive as you wish, by having to work with a team to conduct as much of the business on your behalf as you wish. With creativity, there are lots of possibilities to earn an income from vacant land.
5) It’s All About Location
When you’re ready to buy vacant land in Arizona, whether for your own use or as an investment, the location of the property will make all the difference. Much of this value is based on both the short and long term plans and economic outlook for the area. Through careful analysis of your investment plans and a thorough knowledge of the area, you can zero in on just the right property. One example of location lending high value is the seasonal leasing of land for sales of products such as fireworks, pumpkins, or even Christmas trees. While having the public on your land for this short time period may come with headaches, some investors are able to earn an impressive income from this activity.