Real estate has become an incredibly lucrative venture for investors around the world. It’s the perfect solution for rising inflation and with some creative methods such as fixing and flipping, you can earn big bucks fast.
However, buying developed real estate can be extremely expensive, especially if you are a first-time buyer. So, if you want to enter the world of real estate safely, consider buying land.
At the start, you might think that there’s not a lot of money to be made via this method, but the numbers paint a different picture. There’s an increase of more than 15% in undeveloped land value and it’s only expected to go up within the following years.
What to do before you enter the market
To start your journey, you won’t require a lot of prerequisites besides funds and knowledge of the real estate situation in the region you are interested in. For instance, if you are in Canada and you want to buy land, all you have to do is type in the region you are looking for in your search bar. For example, if you write “buy land Ontario cheap”, you will get a plethora of results you can then carefully review. However, no matter what type of land you’re interested in buying, you need to consider all of the factors at play.
Once you find the desired land, it’s time to enter the next steps which will ultimately decide your profitability in the market. Let’s take a look at how you can carefully navigate this tricky market below.
Do your research
If you feel that you’ve found the right place to invest in, it’s time to enter the due diligence process. The reason for this is that most of the time, with real property, there’s more to the picture than meets the eye. Carefully investigate why the land is for sale and who’s the seller.
After you do that, carefully review all the neighborhood’s crime statistics and determine whether your land is fit for residential properties. If it is, you can expect to get offers really quickly as residential property demand is extremely high.
Prepare yourself financially
If you are planning to purchase land, it’s important to prepare a financial plan. You can look for potential investors or apply for loans suitable to your needs. Of course, with loans, you will have to have a good credit score and a substantial deposit.
For undeveloped land, you can research raw land loans and see whether you can get a good deal from your trusted local bank. After you get the right funds, purchase the area and prepare for the next steps.
However, be aware that banks and loaners usually view land buyers as risks. So, they will ask for a high deposit. In addition, don’t forget that it’s easy for banks to burden you with high-interest rates. In some cases, even if you do sell your land for a substantial profit, it can all go towards paying off your loan debts.
Do some cleaning up
The land you buy might not be in perfect shape and condition. Most of the time, cheap land is filled with heavily wooded areas. To clean things up, you will need a lot of money. Clean-up costs can set you back anywhere from $500 to $5,600, depending on the land’s topography and the crew’s ability to operate effectively.
This will take a lot of time and money, so you better have a budget that’s prepared to handle the costs.
Don’t proceed without guidance
Entering the real estate industry without a helping hand can be detrimental to your investments. There are experts out there that are willing to help you find the best deals and property which is waiting to be sold for profit.
Work with the right partner and constantly seek advice from real estate agencies and real estate agents.
Bottom line
Buying land is always a good way to get into the real estate industry. As things stand, this industry is growing and it shows no signs of stopping. In the future, we can expect more and more opportunities for investors and of course, more profits. If you want to take your shot at buying land, cleaning it up, and building something or simply selling it, take a look at the tips we outlined for you above.
