A Land Of Profit - Buying Acreage as an Investment

If you watch a lot of programs on TV where people are looking to purchase a new home, you will notice that many of them have large acreage on their “need to have” lists.

  • Friday, June 14, 2019

  Matt Angerer

  Land Rentals   

If you watch a lot of programs on TV where people are looking to purchase a new home, you will notice that many of them have large acreage on their “need to have” lists.  


Why is that?  Doesn’t it just seem like adding a lot more work to the work that is already going to be needed to maintain the house?  But, for many people, having a large land opens up the opportunity for a wide range of possibilities. As with any type of investment, there are many pros and cons that need to be weighed out.


An Escape From Reality


One reason to own property with large acreage is to get away from it all.  Having that amount of land offers you separation from neighbors as well as an escape from the hustle and bustle of city life.  If you have ever decided that you want to live somewhere that you could house a lot of animals, purchasing a house with a lot of land provides that luxury.  


Taking care of the land can pose a bit of a challenge.  If you are looking for acres of woods, you are in good shape as far as maintenance goes.  But, if you are looking for land for farming, you will have your work cut out for you. Most likely that is something that you have already considered and are excited about the opportunity to keep up with a big land.


Or, maybe you are taking a whole different approach...vacant land.


New Development


You may be interested in purchasing land to develop new property on.  You could reap the benefits of a massive profit gain if done correctly.  You may decide to use the land for commercial space and, if successful, the land value will go up as well as the rent for businesses to utilize that space.


One of the most exciting pieces of owning your own land is that you hold all the cards in your hands as to how the property can best be utilized.  You can study the demographics and the need of the area to decide what purpose you should use that land for. Zoning restrictions may hinder some of your plans, but you can always plan ahead and work on a program to get those changed.


Purchasing large acreage of land that has not been developed will allow your property taxes to be lower since it is not in a busy section of town.  The purchase of vacant land is also pretty cheap. People that don’t plan on doing anything with land are usually motivated to get rid of it, so the deal to get it done is usually quick and cheap.  


However, time is not on your side when you purchase land.  If you decide that you are going to build on the property, it is going to cost you a lot up front before ever sniffing any rewards.  The land can sit for a long time before you are able to get things in motion.


If that is the case, you will need to figure out some creative measures to bring in some income.  You might consider renting out parts of your property or even selling different pieces to potential buyers.  This can help to supplement some income while you are waiting to build your future plans.


The other piece that can slow down the process is getting permits and approval.  It is imperative that you find out what you can do with the land before purchasing it.  Depending on the zoning of the land, you may be restricted with what you are permitted to do.  And, you could be waiting for an extended period of time for the town to approve what you desire.  They move at their speed...not yours!


State of the Property


The conditions of the property should be taken into consideration before you make a purchase.  What is the septic situation? Is there water access? Are you near a road? Depending on what you are doing with the land, none of the above questions may matter.  


If you are building a house up in the mountains, how will you be able to deal with the steeply graded land?  Is the rest of the land that you have useful after you have built what you wanted to build? You want to be able to get the most bang for your buck, so purchasing a large amount of land that won’t be fully utilized will cost you in the long run.

Long Term Goals


You want to have a plan in mind to act on after purchasing the land.  Letting it sit there for a long time is going to cost you in property taxes and insurance.  That is money that you have taken out of your account to pay for something that is just sitting there.  Think of the money it would be earning on interest. Instead, you have lost that interest.


If you are considering buying large acreage to develop condos, homes, or corporations, larger land may be your best bet.  It is imperative that you have solid expertise in this field as there are many hoops and hurdles to go through, but it could lead to a large profit when completed.  


Follow Through


Ultimately, the decision to buy large land will rest on your financial situation and future plans.  If you are looking to build your own house, finding the right land to build on would be in your best interest.  

Got extra land? Being crafty and innovative with how to best use any extra land can be a very profitable adventure for you.  Go into this type of investment with a well thought out plan and your possibilities for success could be endless.

About the author

Matt Angerer is the Founder and President of VerticalRent. He enjoys writing on a variety of topics that help Landlords, Property Managers, and Renters across America. He is particularly interested in helping renters understand their local marketplace, pick the best places to live, and find an awesome roommate. Since 2011, VerticalRent has grown to service over 100,000 landlords and renters across America. 

Read more articles from Matt Angerer

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