Vacant land can be an excellent investment if you find the right parcel to purchase, and most regions have undeveloped land available. If you're buying land in your area, here's how to maximize your return on investment (ROI).
Anticipate Trends in the Area
One way to increase the likelihood that your chosen parcel of land appreciates quickly is to anticipate developing trends in the area and buy accordingly. Even if you don't have intimate knowledge of the planned construction projects, you can predict what parts of town will develop next by watching the area and monitoring the news.
If a company announces that it'll build a major distribution warehouse in the area, that warehouse -- and the corresponding jobs -- will likely be near one of the area's highways. This placement will ensure that trucks can easily access the warehouse and reduce the company's operating expenses. The people who work in the warehouse will want to build homes nearby.
If you see an apartment complex and restaurant being built on one side of town, a grocery store or other major projects might soon follow. These projects will require land, and there will also be an increased demand for land to build homes on once the major construction is complete. People will want to live nearby because the location is more convenient.
Any time you notice a development project that could increase land value, consider buying land in that part of town. You can't guarantee that the land will appreciate quickly, because issues can arise with construction. This part of town is more likely to appreciate faster than a section of town that's not being commercially developed, however.
Look at Tear-Down Properties
If you can't find the ideal piece of land for sale in your area, consider buying a tear-down property instead. A tear-down property is one that has a structure, which is usually a home, on it. The structure is in such disrepair or so old, however, that whoever buys the land will tear the structure down.
With a tear-down property, you usually don't pay for the structure because it's not worth anything. You might even get a discount to cover the tear-down costs. Once the structure is torn down, you'll have a property that's just like a vacant piece of land.
Plan to Hold the Property
Anytime you buy vacant land that's for sale, expect to hold the land for some time. You'll have to wait for the right buyer to come along if you want to sell the parcel for maximum profit, and that buyer might not come along for a while. For more information, contact a real estate company like Gloria Jones - Re/Max Real Estate Experts.