Just about everyone dreams of home ownership. But what about land ownership? Sound expensive?
It isn’t as expensive as you might think! In fact, land costs drop the further the parcel is from the nearest city, and there are many other benefits of buying land.
5 Benefits of Buying Land as an Investment
- If you decide to build your own house on the land you purchase, you have the power to choose where your new house will be located and exactly how it will be designed. No need to settle for a boring cookie-cutter house at the end of the cul-de-sac.
- Tax benefits also come with vacant land ownership. For example, the property taxes charged on the vacant land is deductible as a personal itemized deduction.
- The land value can appreciate the longer you own it, meaning you will profit from reselling it in the future, because unlike houses, land doesn’t typically fall into disrepair. It will generally stay in the same condition you bought it in. Investing in vacant land is also highly dependable because land never goes out of style. As communities grow and new communities are created, real-estate companies and the like will need land again and again.
- Depending on the community’s zoning, you can use your land for any variety of purposes: a new house, a farm or garden, a new business location, a place to ride horses or go camping, and so much more.
- You could also potentially earn income from the land, letting it pay for itself. For example, if there are tons of trees on the property, you could sell the extra wood or the right to harvest the timber. You could even lease the land to a farmer.
Know What to Look for When Buying Land
We all know that a house might look perfect at first glance, but upon further inspection, you could find that the upstairs bathroom shower leaks, there are termites in the walls, and the oven that the sellers are so generous to leave there for you only works if you set it to “broil.” Although checklists are a little different for vacant land, the process is similar.
First, check the topography and other general features of the land. If you cannot visit the land in person, it can be relatively easy to pay someone else to check it out for you or just view the parcel on Google.
Knowing what you might want to do with the land can help direct what kinds of things you’ll want to check. Do you plan to garden or farm there? Build? Sell the land to developers when it has appreciated? Think through the details and what might be important, like gradation, flood risk, location, etc.
For example, if you have several steep hills covering your land, it might not do you or anyone else any good for building purposes. And stagnant ponds on the property might pose a health risk or make it difficult to grow a garden or lawn.
You should also have the soil inspected for percolation, acidity, and similar details.
At Low VA Rates, we work with our clients every day to ensure they are getting the most out of their money and that they are making smart financial decisions. Saving our clients money and educating them about possible home buying options are major priorities. If you’d like to learn more about buying undeveloped land, visit our site.