A quick and easy way to begin building a real estate portfolio is through the purchase of land investments. However, not all parcels of land are created equal. To find the piece of land that is right for you, ask yourself these questions first!
Land investment is hotter than ever. A new generation of investors are looking to begin their portfolios and many of them are finding success through land investment. With comparatively low costs to get started and little to no overhead, investing in New York land has become a very attractive investment option.
Question 1: What is the end goal of your New York land investment?
When investing in real estate, no matter what kind, you should run projections to help you determine what a property will bring in. Land typically doesn’t make you money while just sitting there unless you lease it out. Many investors make their profits by buying and selling land. Buying low and selling when a profit is made. By repeating this process over and over, you will streamline your methods and be to build additional income for yourself. Before you begin investing, set goals. What do you want the land to do for you in both the short and long-term? Will the property you purchase produce the returns you are after?
Question 2: How is the location?
The land you purchase should be in a desirable location. Whether you plan to develop the land or resell it, it has to be somewhere people want to go. A piece of land in a remote location isn’t likely to appreciate as quickly as a piece of land that is in demand. Research county information to learn about any future development that might be taking place near the land you plan to buy.
Question 3: Are you aware of all current and future zoning?
Zoning can obviously have a big impact on what you are able to do with the land. Don’t just research your potential property, but take a look at what is surrounding you. A residential lot might not have the same resale value if it is located next to a commercially zoned lot.
Question 4: How much land do you need?
How much land will you need to buy? Maybe you are looking for a simple single residential lot. Or maybe a large commercial lot. Or maybe you want a large parcel to subdivide. Don’t just by land because it’s there, make sure it is meeting your needs!
Question 5: How will you purchase investment land in New York?
Before you buy land in New York, you need to determine how you will pay for it. If you are looking to get a loan, the process is a bit different than obtaining a traditional mortgage. Many people use cash to pay for the land they buy in New York. If you are not paying in cash, watch out for buyers who are. They can be some tough competition when offers are being put on the table. Many people will favor the ease of a cash sale.
Question 6: Are there any building restrictions?
Before we ask the question below, you should first ask yourself if there are any building restrictions on the lot. Even if you aren’t developing the lot yourself, the person you sell it to might want to. Selling undeveloped land, that isn’t buildable, isn’t very easy. There can be all kinds of things that prohibit building, bad soil, rare birds living nearby, and many other things you might not have
Question 7: Do you plan to develop the land yourself?
If you want to develop the land to add value, run your numbers first to make sure you are aware of all the costs. There could be leveling, soil testing and many other costs aside from the actual building itself. While developing the land yourself might require a hefty investment up front, it can be highly profitable in the long run.
Question 8: Will you be able to generate any income from the land itself?
If you are holing the land, hoping to sell when the value goes up, there are some things you can do with it in the meantime to make some cash. Depending on the size and location you can do one of many things. Lease the land to a nearby business for parking. Or if it is a larger parcel, lease the land for recreational uses. Hunters, outdoor enthusiasts and
Question 9: How quickly is the land appreciating?
Have you been following the land’s value over time? Take a look at the past value and sales records to see if it is appreciating at the level you would like it to. If the value is staying pretty stagnant, you might want to look at a different parcel for your Oswego land investment purchase.
Question 10: Will you be able to resell it quickly?
Every investment should have an exit strategy in place. No matter what you are investing in, it is important to have a way out when you need it. With land, you could choose to resell, develop, lease, etc. Just make sure that your way out is viable, and will bring you the cash you need when you need it.