There are literally millions of vacant land listings in the United States. The idea of going through them all would seem daunting and exhausting—no doubt.
So if you’re someone wanting to get into land investing, where should you start looking? The answer to that question and more below.
Begin With Location
First, decide where you’d like to buy land. The best indicator that an area is going to be good for land investing is to find which location has movement.
That’s to say, where are people already buying and selling land. If investors are already putting money into vacant land in a certain area, then you can almost guarantee that it’s a good location to put your own money in.
So how does one find these trends? You’ll need to spend some time studying the local real estate market. You can search public records, MLS listings, real estate publishings, and online resources to find recent and past sales on vacant land.
Choose From the Low Hanging Fruit
After you find a location with positive trends, look for vacant properties with outstanding or delinquent tax payments. These listings are the low hanging fruit on the tree.
There are many possible reasons a property has delinquent tax payments. Maybe the owner has fallen behind due to financial problems, or it’s possible they simply forgot about it.
Whatever the reason, delinquent taxes on vacant land is a good indicator that the owner is motivated to sell the property. Finding these listings is a matter of getting a hold of the county property tax office and asking for them.
Analyze and Price
Once you have your list of properties it’s time to analyze and price them. Figure out the market value of land by acre in that area, and send out letters of a cash offer for land.
Your offer should be no more than a quarter of the market value and is meant as a conversation starter. The more letters you send out, the more chances you have of getting a response with a counteroffer—or better yet, a signed deal.
Keep the letter simple. State your business and that the offer given is contingent on you doing due diligence on the property. Leave a blank line for a counteroffer and give your contact information.
What Is Due Diligence?
Let’s say you send out 10 letters of offers and you get a hit on one. Now it’s time to do your due diligence.
The due diligence that we’re speaking of is you doing the work of fully researching the property. If taxes are delinquent, then know exactly how much property taxes are owed. This can give you even more room to negotiate the purchase price.
And probably most important, find the chain of title. This will ensure that the person you’re looking to buy from actually has legal authority to sell the land to you.
Is Land Investing Profitable?
It’s no secret that land is a limited resource. And of course, this means there will always be a demand for it—making it one the most sound places to invest one’s money. With enough due diligence and effort on your part, you can easily create revenue through land investing.
After reading this short guide, we hope you now have a good idea of where to start investing in land. If you found this article interesting, check out our other investment tips in our blog section.