Vacant Land Investing: What You Need To Know To Turn Land Into Profitable Land

Investing in vacant land is not rocket science. It is not difficult and you do not need to be a millionaire to start. However, investing in vacant land is not for everyone. Some people just aren’t interested in dirt. They prefer to invest in gold or other businesses. But, with the right tools, information, and knowledge, raw land can take you from dirt to profitable dirt.

Land, hectares, lots and non-developable properties are considered vacant land. Despite the “pessimism” regarding the real estate market, virgin land is a great investment right now because most properties are undervalued. And what better way to reallocate those underperforming assets in your portfolio than real estate?

So where do you start if you want to invest in virgin land? First of all, you need to do some research. The vast majority of people don’t even take the time to learn how the land business works. They simply take the advice of a friend or relative (someone who has probably never invested in land) that investing in land is “risky” or “doesn’t work,” and keep looking for another way to get rich quick.

The best thing about investing in virgin land is the benefit of control. You are in control of what happens to your money.

To fully understand the benefit of control, let’s first look at a situation where you have no control, such as the world of mutual funds. You invest your money by giving it to someone else who invests it for you. Where do they put it? They put it in companies over which they have no control. You are assuming an educated guess that the company knows what it is doing. But then Enron or Bear Stearns happens, and you lose. Sometimes you lose everything.

The land business is different. In the business world, you get into trouble when you make an investment decision based on some knowledge about what’s going on with the company. They call it insider trading. It’s what Martha Steward feels like in the slammer.

But, in the land business, you must make your investment decisions based on an understanding of what’s going on with the land. Or what will happen to the earth.

Buying undeveloped land is a completely different experience than buying a lot that already has a house on it. If you’re considering investing in raw land, you should have access to knowledge that will help you quickly and efficiently separate winning investments from losing ones.

There are three key things you need to know before you buy raw land. You make your decisions based on:

1. Access: How accessible is the property? How easy is it to get to land?
Where are the roads?

2. Utilities – The most basic thing to know is if there is a proven source of water on the property. Also, is there electricity? What about the sewage?

3. Growth: What is the projection of the area where the land resides? What are the forecasts for population and economic development? Is the area growing, will it continue and for how long?

Another important element you need to be successful is your connections. The more people you meet in this business, the more opportunities you will have. (Opportunities that most other investors will never know exist). How do you find out about all this?

The nice thing is that it is not privileged information, although you have to know where to look. Much of this is public record. Information is also available through the media, on government websites, in regulatory publications, or other places that can be a little hard to find. But, with a little effort and knowing how, you can find them.

Many fortunes have been made in the purchase of undeveloped land by investors who understood the concept of buying land and holding it until it appreciates. So an investment that is under your control, appreciates over time, and diversifies your portfolio is a winning combination. It may be dirt, but raw dirt can definitely lead you to pay dirt.