Everything is possible on your vacant land because the land is empty and you decide what to do with it as the owner. Buying a land is similar to starting a small business with low cost and maintenance. Thus this alternative investment is viewed as one of the major ways to diversify your portfolio and against financial risk.
Before we congratulate you as a new landowner, we listed 4 things to enhance your abilities to increase it’s net worth.
1. Hold for sale.
Pros: No extra cost except paying the property tax, no headache of maintenance like a rented house. This is a long term strategy. If you have limited time and budget for any real estate project, this would be the most basic and stable strategy.
Cons: No cash flow.
Solution: Use retirement funds or spare cash to purchase the land. Then sell it when profit accrued.
Pros: Building a US style farm on a vacant land may sounds like a dream to you but this is totally applicable with agricultural land. You can have cash flow by providing agricultural products.
Cons: It is constrained by seasonal changes; you need more cash and water to support this idea.
Solution: Choose land within the boundaries of a water district, if not you will need to build a water pipe system that connects to a water district.
Pros: This is the best choice for an investor. Wealthy people such as Warren Buffet would view vacant land with the mindset of developing it. With the land, you can either develop it by yourself or sell it to developers. You can also start a business. If you want to start your business on your land, you should have knowledge on local industrial and policy. The leading industries in Northern Los Angeles are defense, aviation, green energy, automobile, and biomedical, etc. You are not limited to only building houses or retails. There are numerous other opportunities, for example, parking lots, golf courts, auto services, nursing homes, and private schools, etc
Cons: Need more funds, zoning restrictions; some land cannot be sub-divided, thus limiting its value.
Solution: Figure out the zoning before purchasing. Location is the upmost important factor. People seldom would want to live far from downtown with no building and utility around. Buy a parcel close to existing development, such as retail buildings or homes. Therefore, it is more desirable to a developer or an investor.
Pros: You can get income by leasing land to farmers, factories, or companies.
Cons: Your land may be tied for a while until your lease expires.
Solution: You need to choose your land in different sizes and locations for different purposes.
With the above 4 models, you will have more ideas to manage your land besides waiting for appreciation. You should consult our land banking specialists to purchase a parcel that is suitable to your financial situation.