5 Tips for Investing in Raw Land

Raw land is one of the most disregarded and overlooked types of real estate, and many investors fail to recognize the advantages and benefits of investing in a raw piece of land. Due to its limited supply and increased demand, raw land can be an appreciating asset with great potential for a quick profit capable of producing severe cash flow. Raw land can also be easy to acquire, flexible, versatile, and generally has a lower cost to own and maintain. Just keep in mind that this is all contingent on purchasing the right piece of land at the right price. We've listed five tips that you should consider when investing in raw land to help assure a significant return and profit.

Always Consider the Location

Location is one of the essential aspects of investing in raw land. You can never change the property's location, therefore it should be your first consideration. The location also determines the value of the property, so you should consider investing in land located inside or near significant cities because the value tends to appreciate faster. The location may also make the property desirable for potential buyers. Where the land is located determines whether it can be developed into a residential or commercial space, so always do enough research and check the neighboring areas to get an idea of the property's potential and suitability for your intentions. If you're getting the raw land for residential use, check whether it's near a hospital, schools, and shopping centers. If you want to invest in raw land for commercial use, make sure it's neighboring potential customers and has access to the roads. Checking the location also includes knowing the crime rate in the area or whether it is in a flood zone. Make sure that the site is generally safe and secure before buying in order to save you from any future risks.

Make Sure Utilities Are Accessible

Do not waste your money investing in raw land that is too far off the grid, and remember that utilities are typically necessary when developing a piece of land. Check to see if there is electricity, sewer, water lines, phone lines, and internet connection. These factors can affect the overall cost of development if you are planning to use the raw land. Keep in mind that it may cost around $10,000 to $30,000 to install necessary utilities depending on the proximity of the raw land to the utility connection. It may be best to get a property nearer to utility connection since the lack of available utilities may reduce the property's usability, value, and marketability. These utilities are one of our basic needs, and you'll want to consider whether the raw land should have access to these basic needs.

Save Time by Getting a Buyer Agent

Investing in raw land requires searching for properties, visiting the land, negotiation procedures, and more. Managing the process can be difficult and time-consuming, so it might be beneficial to get yourself a buyer agent who will do these tasks for you. These individuals tend to be skilled negotiators, so you can generally be assured that you'll get a reasonable deal out of any property you're buying. Many times, buyer agents have access to off-market sales which may allow you to get raw land that has a more significant investment. They may even be able to seek deals that are interstate or overseas. You will also save yourself from the stress and emotional distress of dealing with negotiations and processes from investing in raw land when getting a buyer agent. If you're interested in getting a buyer agent, check out Buyers Agent Australia which provides agents that can help get you some of the best properties at a great price.

Check the Zoning and Permits

Zoning is the classification of the land; and raw land can be designated as residential, commercial, industrial, agricultural, mixed-use, etc. Checking the zoning allows you to determine the best use of the property, and you can do this by calling the local planning and zoning office. You can also ask what type of properties would be allowed in particular zoning classifications which will help you identify whether the raw land fits your needs. Ordinances, on the other hand, are rules that state the things you can do and can't do with the property. If you intend to buy a property to develop it, keep in mind that it will require permits which prevent you from making huge mistakes during the development process. Some of the permits you need to acquire for the construction process include electrical, plumbing, building, hazardous materials, regulatory and title issues, and types of structures you are building. These permits are legal investments that will provide you the building codes to which you should adhere in order to ensure safety between you and the future occupants of the property. Keep in mind that different states may have various restrictions, so it is best to check into those before acquiring the raw piece of land.

Know History

Knowing the previous purpose of the land is essential, especially if your intended purpose for the area is for residential or commercial use. You don't want to discover that your land was a previous dumpsite that has unearthed some junk during the building process or that it has contamination and environmental concerns as a result of actions by the prior owner. Unexpected factors like debris and environmental concerns can significantly affect the development of the land. It can also cost you more money to build property in a vacant lot that has plenty of commercial junk.

Any raw land investments can be a risk; but with some proven tips, investing can be easy even for first-timers. Take note of these tips so you'll be a little more ready to invest in property in the future.