If you are an experienced investor, you're probably aware of the advantages raw land has over other types of investments. But if you're just starting out, you may be oblivious to what they are. Land investing can be very financially rewarding, but there are some pitfalls that beginners can fall into if one isn't careful so it would behoove you to really learn as much as you can about the topic. Here are the basics.
When you buy land, chances are good that it has either already been developed or you plan on developing it yourself. But raw land involves buying land that is untouched. It refers to land that has never been developed, so you need to approach it differently than other types of land.
If you are new, you should probably consult the aid of a specialist. Keep in mind that not all real estate agents are experienced with raw land. In fact, most real estate agents are more interested in selling property that has already been developed in some way. So, an agent that has been trained in raw land will be a great guide. Often times they will know a lot about building codes that can lead you into buying the right property depending on what you would like to do with it.
There are some things that you really need to keep in mind when you invest. Most important to think about is location - do you want to develop the land? Then you need to consider what is around it. If you aren't planning on developing it, then you need to think about if the property will increase or decrease in value because of its location. Second, you need to find out if city utilities will reach the area. Since it has never been developed, you might need an agent with experience to help you find out.
When investing in raw land, you will find that you need advice from experienced people. They can help to guide you and make sure that you are following local and state laws. Keep studying and always keep a watchful eye open for opportunities and soon you may find some great raw land to invest in.
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If you're interested in learning more about investing in raw land, check out my Investing in Land blog for more info.
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