Reasons to Consider Why Buying Undeveloped Land is a Good Investment\
Reading Time: 9 minutes
Are you wondering how to utilize your hard-earned money and earn significant returns without worrying about losses?
Financial investments are the most favorable alternative for growth to simply watching your money sit idle in banks. If you are aiming to invest for long-term plans and earn significant returns without worrying about the risks, real estate investments, specifically investments in raw land are your key.
Talking of the real estate investment market in USA, as per reports, the value of underdeveloped land here is approximately $16000. Real estate experts state that there are abundant acres of underdeveloped lands that can bring you wholesome returns.
If you are a novice investor in the real estate market, it is natural to wonder if buying underdeveloped is a good investment idea. To clear your confusion, and make an informed investment decision, read this blog till the end.
Table of Contents
What is Underdeveloped Land?
To decide is buying underdeveloped land is a good investment land, let’s explain to you in brief what underdeveloped land is.
In simple terms, underdeveloped land refers to a property or piece of land that lacks any kind of human infrastructural improvement. Thus, you can find underdeveloped land for sale in a natural state or very less instances of development.
Buying such property for land investment practices holds several benefits as it offers infinite potential for future development. After buying underdeveloped land, you can utilize it for diverse purposes such as agricultural, commercial, residential, recreational, development, or conversational.
However, you must have a thorough idea about your investment goals, and overall budget to go ahead with this.
Why Buying Underdeveloped Land is Considered a Good Investment?
The choice of whether you must invest in developed land or underdeveloped land relies largely on your objectives and budget. During your research, you might come across several suggestions on which land to choose.
However, even in immense confusion and temptations, consider abstaining from falling for ‘he said/she said’ judgments. To help you make an informed decision, here are a few points you might like to consider while deciding on buying underdeveloped land for sale near me.
1. Control Over Development
Very often, purchasing already developed or used property limits your options to utilize the same in different ways to fulfill your investment goals. Whereas, by buying an underdeveloped land for sale, you have the freedom to utilize the property in any way to fulfill your goals. That being said, you must be aware of the zoning laws and the land quality before purchasing. This is a helpful measure to avoid any instance of government or natural interference on the path of your real estate investment goals.
2. Lower Maintenance Expense
This is another important perk you must note while pondering upon is buying underdeveloped land a good investment.
When you buy a property with a significant amount of construction or development activities, you would need to spend a good amount to maintain the property well during your ownership tenure. Furthermore, such properties tend to carry higher property taxes and mortgage interest rates.
On the contrary, you do not have to pay a hefty development expense to maintain an underdeveloped property. Here, you would only require to cover the necessary costs to ensure the property demand and value appreciate with time.
Furthermore, you can purchase the cheapest underdeveloped land for sale in the US with a high potential for future value growth. Such properties also tend to come with flexible zoning rules and lower property taxes. Moreover, lenders also tend to charge comparatively lower mortgage interest rates while buying underdeveloped lands as compared to their developed counterparts in similar locations.
3. Privacy
Very often, you can find the best underdeveloped land for sale convenient for your finances and goals in rural or remote locations. Such a location offers your land privacy from the major hustle and bustle of city life. Thus, purchasing such property can be a boon in disguise if you are planning to utilize this land investment opportunity for non-residential purposes.
Staying away from the city offers you the opportunity to utilize the land for sale for innovative purposes like developing and leasing it as a warehouse. You can also utilize the property for natural energy resource development projects or build a park or natural habitat for flora and fauna.
4. Long-Term Asset
If your goal is to venture into real estate investment to materialize your long-term investment plans, purchasing raw land for sale should be your move. This is because one of the major reasons for buying land is the higher potential of land’s value to grow in the long term than any other assets.
As discussed earlier, the cost of purchasing raw land is comparatively less than developed lands. Furthermore, as these are underdeveloped properties, you can explore them more than the latter regarding development practices to earn better ROI. This makes underdeveloped land investments a go-to option if you are planning to hold the property as a long-term asset.
5. Higher Flexibility to Use
The flexibility of utilization is another advantage for you to consider if you are wondering is buying an underdeveloped land good investment.
On purchasing raw land, you can utilize it as farmland, hunting ground, renewable energy reservoir, stadium, playground, house, shopping mall, and the list can go on. Whereas, if you purchase an already developed property, say land for sale with a building or remains of farming activities, your option to utilize it as per your goals chops down.
Nevertheless, if you are still adamant about utilizing the developed land as per your goals, you would need to demolish the existing developments. Thus, the process of redeveloping the property can burden your finances in the long run.
6. Affordable
If you are a novice investor and wondering should I buy an underdeveloped land? Here is good news for you.
As compared to developed lands, underdeveloped or raw lands are cheaper and more affordable. While judging the affordability of land, you would like to consider the property’s overall expense along with its purchase price.
In this context, real estate experts suggest novice investors opt for rural or underdeveloped land. Such land for sale does not carry huge development and maintenance costs and its purchase price is also lower than lands with a certain amount of development activities in the past. Furthermore, lending institutions also charge more convenient interest rates for purchasing underdeveloped lands than their counterparts.
This reflects the affordability and growing demand for underdeveloped lands for sale in the USA. Furthermore, with certain authentic land listing houses, like APXN Property, you can purchase land without worrying about a low credit score. To fund your plans, you can opt for alternatives like owner financing over mortgage loans.
7. Better Chances for Appreciation
Finally, to ease your decision-making process regarding is buying underdeveloped land is a good investment, you must remember this point.
Underdeveloped lands for sale are mostly situated in locations that have the potential to grow in the future. Consequently, the demand for properties nearby will grow with time so will their values over the years.
However, in the case of developed lands, this chance slightly lowers depending on the condition of the existing developments, investors’ purchase trends, and most importantly competitor markets.
Bottom Line
To conclude, these seven reasons above will help you decide is buying underdeveloped land is a good investment or not. By knowing these reasons, you can explore the real estate investment option and purchase land following a comprehensive land investment guide.
So, if you are looking ahead to grow your finances with real estate investments and are searching for the best opportunities, we got you covered.
Explore our website for listings and updates on rural or underdeveloped lands in Oregon and other prominent parts of USA. You can also connect with our experts at APXN Property for any assistance regarding property search as per your goals or investment procedure.
Frequently Asked Questions
Common Pitfalls to Avoid When Buying Cheap Land
Reading Time: 8 minutes
The growing demand for real estate properties in the USA is a prime reason for its spiking prices. However, this spike in land values does not discourage investors from investing in land for long-term gains.
It is no secret that land investment opportunities act as leverage against volatile stock market fluctuations. Thus, from real estate investment, you can earn significantly high ROI, and is also a less risky investment.
However, to make the best out of land investment, there are several dos and don’ts you must remember. Certain misjudgments can backfire and cause you to lose your hard-earned money.
To know what to avoid when buying land and earn significant returns, read this blog till the end.
Table of Contents
Top Mistakes to Avoid When Buying Land
If planning a land investment, consider browsing through the points to know what to avoid when buying land. These shall help you proceed with your upcoming land investment plans in an organized manner.
Half Baked Research
This is one of the most common blunders people commit when buying land. Very often, you would come across real estate investors purchasing lands on basis of he said/she said. They do not conduct thorough research before buying, affecting their returns after a certain period. There can be other consequences such as legal, financial, or environmental issues or chances of being scammed. Therefore, rushing the research or not conducting thorough research is what to avoid when buying land.
The scope of comprehensive research involves a background check of the property, environmental, security concerns, and long-term development projects in the neighborhood. Besides these, you must also research the real estate agents’ other projects and ownership documents of the property.
Neglecting Access Issues
This is another mistake on what to avoid when buying land. To shortlist properties for land investment, consider confirming whether the land has any legal access or not. Very often, certain plots of land do not have Right of Way access.
This renders such property unusable. Rushing your purchase decision to buy such land can hamper your plans as their value might not increase significantly with time.
Not Considering Development Cost
The cheap price of land might look tempting, however, rushing the purchase decision solely considering this is another crucial what to avoid when buying a land.
To invest in land, along with the purchase price you must consider adding up the development cost. This is the expense that you would need to undertake to make the land functional and align with your investment goals. This can include building a home, or storage unit, or developing farmland. Not considering these expenses will burden your finances and would be tough to manage in the long run.
Overlooking Environment Restriction
This is another important point from land buying guide tips that you must not overlook during land investment. Properties like flood zones and conservation easements tend to have diverse environmental restrictions and conditions regarding land development. Ignoring them is another what to avoid when investing in land.
Such zones are usually found in sensitive regions, therefore, rash development activities cannot just hamper your project. It can also harm the ecosystem nearby. Therefore, while shortlisting a property, consider making note of these restrictions and plan your investment goals accordingly.
Failing to Plan for Long-Term Holding Costs
As discussed before, land investment does not just involve the purchase price alone, it also involves several additional expenses. These include utility costs such as electricity, water, or gas, insurance, property taxes, debts, and management fees. Ignoring them is another important what to avoid when buying land.
These expenses might cover a very long period or the entire period of your ownership. Therefore, while shortlisting land for sale, your research must include an estimate of expenses that a particular property may cost you. This will help you choose the right property and be financially prepared to bear all expenses. Consequently, taking care of this will not negatively impact your ROI in the long run.
Not Considering Resale Value
Another major mistake investors make during their land survey is not paying attention to a property’s resale value. Having an idea about the prospect of the property in question provides you with an edge while negotiating during purchase.
Factors like location, neighborhood, future development plans by local authorities, security, and accessibility tend to determine the resale value. This shall also impact your ROI in the long run if you ever plan to sell the property.
Thus, not considering the resale value of your shortlisted property is a grave financial mistake and what you must avoid when buying land.
Not Opting for Professional Advice
Going solo is another crucial point that you must consider as to what to avoid when buying land. To make the best use of your land investment opportunity and earn significant ROI, consider opting for expert guidance. This is essential for both seasoned and new investors especially when you are looking forward to investing in an underdeveloped land.
With expert assistance from real estate agents, lawyers, and surveyors, you can rest assured that the ball is always in your court. They will ensure you are making an informed decision with every information about the property. Lawyers can also provide you with legal assistance in understanding the terms and conditions of the seller. This is an important step to ensure the seller is not scamming you.
Bottom Line
To conclude, to ensure you are investing your hard-earned money in a property that perfectly aligns with your investment goals, these above points are what you must avoid when buying land.
Furthermore, if you are hunting for properties online, consider browsing authentic land listing websites like APXN Property. Here, you can find endless options of rural and raw land for investment in USA at competitive rates.
Also, to purchase land and earn significant returns, you must have a clear idea of your finances and land financing options apt for you. In case, you are unable to secure a mortgage loan to fund your plans, no need to delay your investment goals. With APXN Property, you can also search for land options with owner-financing alternatives.
