Tips for investing in vacant land
| There is more to investing in property than just buying
rental units, with the attendant worry about finding suitable tenants,
collecting rents and maintaining your asset.
So says Berry Everitt, MD of the Chas Everitt International property group, who notes that one other option, for example, is to buy vacant land and wait for value growth.
Coastal, mountain and river-frontage property can be a keen investment, as such areas are targets for lifestyle developers and buyers looking for a piece of land to build a holiday getaway.
Land on the outskirts of fast-developing towns and cities may be another good bet although it may have to be rezoned from agricultural or light industrial use.
And even land out in the sticks may turn out to be a profitable investment if you are prepared to hang on for the longer term, because land is becoming a scarcer commodity and the scarcer it gets, the more values grow.
Writing in the Property Signposts newsletter, he says, though, that buying land is not that different from buying built property and that if you plan to apply for a bond the bank will still want to make sure that there is enough underlying value.
Choosing a stand or tract of land also requires some research. Aspects that should be taken into account include location as with other property future development plans in the area and zoning.
Other issues that should be borne in mind are mineral rights and property tax. The latter is payable on most vacant land, although it is likely to be much lower than on developed land, while property on which a mining company, for instance, holds the mineral rights may be more trouble than its worth if the company decides to take up its rights and start mining.
You should also keep in mind that even vacant land needs maintenance such as keeping grass short, especially if the property is in a residential area, says Everitt.
Article from: www.chaseveritt.com