5 Things That Deserve Your Undivided Attention Before You Buy Raw Land

Not unlike its developed counterpart, raw land can hold incredible value for residential redevelopers and investors. In the right hands, it can result in a lucrative payday, provided due diligence is minded. It’s worth noting, however, that while vacant property can be flipped successfully, it’s not without it’s caveats: If for nothing else, there are several differences between the strategies used to develop raw land into an investment opportunity and your average developed suburban home.

It’s maintained that raw land investment strategies award savvy residential redevelopers the opportunity to realize unparalleled success. However, success will not come without the appropriate knowledge and due diligence. If you want to flip raw land successfully, there are several things you need to know. I highlight five of the most important differences between an average flip and a raw land transaction below.

  1. Location

We’ve all heard it before; real estate has one cardinal rule: location, location, location. For what it’s worth, buying raw land puts the age-old adage to the test, as the location in which you intend to buy vacant land is of the utmost importance. Think about it: Regardless of your intentions, location is the one fundamental indicator that will influence how everything transpires from the moment a property is acquired. Remember, location is the one thing you can’t change once you take ownership of a property, so make sure it checks all of your boxes.

Residential redevelopers, or those intent on developing the land to flip it (real estate new build), must first acquire a lot with not only resale value, but demand as well. There is no other way around it; the land you buy must coincide with a value that you deem worthy of a viable return on investment. Neglecting to mind due diligence up front could result in the acquisition of a property without much value, let alone enough to recoup your initial expenses.

The land you purchase should compliment your intentions. Those looking to start a business shouldn’t buy isolated land far from customers. And it should go without saying, investors shouldn’t buy land they can’t build on. Having said that, it’s a good idea to compile a check list — criteria, if you will — of everything you need in a property to carry out a successful investment.

Once you are confident that you can build a home on the land in question, take note of whether or not it has everything you will need to move forward with a real estate investment. Remember, everything missing from your checklist will coincide with an additional expense later down the road, in addition to the cost of building a home. Above all else, be sure that the land you intend to purchase has everything you need, including the permission to build a property. Location isn’t only about where the home will be, but whether it fills your most basic needs as an investor or not.

  1. Additional Costs

The most successful investors in today’s industry are more than aware that real estate requires both an investment of time and money. That said, you are more likely to spend your money in an efficient manner if you put the time in before hand to mind due diligence and educate yourself on the proper procedures to develop raw land. Only by doing your homework can you fully expect to know the true costs associated with buying raw land and developing it. I maintain that a proper education and a clear understanding of what lies ahead is the only way to successfully invest in vacant lots, and the costs of developing raw land are no exception. It’s in your best interest to know exactly what you are getting into.

In the event you decide to buy raw land to build a property, you will need to account for a litany of expenses that are likely headed your way. For starters, you will need to have the land surveyed to identify its boundaries. Depending on the location, you may have to clear natural obstacles in order to make room for a sturdy foundation. Remember, nothing comes free; building on raw land comes complete with a lot of additional expenses, all of which can add up very fast. Before you buy the land, be sure you have accounted for every additional cost you will incur.

There is, however, one cost those investing in raw land for the first time must become acquainted with, and fast: utilities. Not unlike your average property in a developed neighborhood, the house you intend to build will need utilities — no surprise there. However, it’s safe to assume the raw land you are building on is void of such a luxury. There is a reason they call it raw land. It’s not uncommon for raw land investors to incur additional costs for the sole purpose of running water and electricity to your unbuilt home. Some lots may even require you do dig a well or install a septic system, and that’s before you even break ground on the home itself.

  1. Zoning Restrictions

In their trust form, zoning laws are essentially a list of rules that identify what can or can’t be done with the land in question. They are integral to an investor’s project and not to be overlooked. In fact, you could argue that nothing is more important to a land investor than the zoning laws that govern the property up for sale. Neglecting to account for zoning laws can be a costly mistake, and one that can potentially ruin the bottomline of any investment. That said, it’s in your best interest to know which zoning laws apply to the land you intend to buy.

Fortunately, identifying zoning restrictions isn’t complicated. It’s entirely possible to find out the necessary information at your local zoning office, which can be found in any U.S. county. You can also find a great deal of information online or in county records made available to the public.

It’s worth noting, however, that you should not only pay attention to what your land is zoned for, but also any long-term plans the county may have. If for nothing else, you want to have a clear picture of the long-term prospects of the land you purchase. The last thing you want for a real estate investment property is to find out a highway is planned to bisect your backyard sometime in the next decade.

Again, zoning restrictions identify what a property can and can’t be used for. If you intend to build a home on a property, you had better be certain you can do so. But don’t stop there; find out what else you can and can’t do with the property and make sure it meets your criteria.

  1. Road Access

While not something the average real estate investor has to contemplate on a daily basis, those looking to invest in raw land must address the issue of access. If for nothing else, a parcel of land — no matter how great it is — will be of no use to an investor who can’t access it.

It’s easy to underestimate the importance of road access, especially when it is a luxury you have grown up with for the better part of your adult life. However, there is a good chance that the majority of raw land plots you intend to purchase don’t come complete with their own roads. While less of a problem in urban areas, a distinct lack of road access in rural areas can be a major problem. Road access not only impacts the development of the land itself, but also those who intend to live there in the future.

  1. Permits

Those familiar with the real estate investing industry are already well aware of the prevalence of permits. It’s sad, but a reality nonetheless: nearly everything you attempt to do as a residential redeveloper will require some sort of permit. While annoying, permits are a necessary evil, and prevent some people from making huge mistakes. If for nothing else, construction permits keep your efforts honest and building codes at the forefront of every undertaking. Seeing as how those building codes were put in place to protect occupants, you could argue that permits are an important safety measure we should all be thankful for. Adhering to building codes will result in a sound investment you can bank on, figuratively and literally, for years to come.

Having said that, you should be ready to apply for a variety of permits if you ever home to build a house on the recently acquired raw land. According to How Stuff Works, “the construction process is laden with permit requirements, from plumbing to electrical work; on the bright side, at the end of the day, all that paperwork will guarantee a solid, completely legal investment.” How much more can you ask for? Want to learn more about investing in raw land? Contact the Asset Quest team today!



How to Invest in Land

It takes considerable knowledge to understand the extent of one’s ignorance.” So goes an impactful saying that reflects human tendency to approach the unknown with doubt and trepidation. Today’s personal finance or investment scenario is a great example of how knowledge or rather the lack of knowledge can influence our decision-making process. The first thing that comes to your mind when you think about investment instruments like fixed deposits, provident funds, equities and stocks, mutual funds is an overriding principle. The principle is a product of continuous messages that come our way through ‘advisors’ be it family and friends, colleagues, financial media and the internet.

What are your thoughts when someone mentions land as an investment instrument? Chances are that it is not the most positive of reflections. Does ignorance play a major factor in this perception? We will make an attempt to dispense some myths about investing in land and inform readers of the best practices to adopt and pitfalls to avoid when it comes to reinforcing your investment portfolio with land as an asset class.

Let’s focus on an oft-ignored product in real estate that is land. Investment volumes are lower than other real estate products and returns are stable and are in the high category bracket if the locations are chosen correctly. Let’s get into details so we can explore the investment category to its full potential. Land investment includes different kinds of potential land investments like:

Residential development land, which is predominantly used to build houses. These plots can be used to build independent houses, apartment buildings and villas. Another option is commercial land whose intended use is commercial in nature like office space rentals or sale. Farm land is typically devoted towards agriculture, so if you plan to cultivate on it, then invest in the farm land in accordance with its fertility level. While recreational land might be part of or might qualify for several governmental programmes, it is necessary to procure permits from the municipality or you can take help from a developer.

According to a Knight Frank report,  land (134%) was the best performing entity of all investment options in terms of value appreciation between 2008 – 2015, followed by gold (87%) and Unit Linked Insurance (74%).

Land investment, like any investment option comes with its own set of advantages and challenges, which depend primarily on your investment goals. The main highlight of purchasing land is that it is a tangible asset and because of a constant and steady increase in demand, the returns are more or less assured over time. Land has better resale value with comparatively lower cost and property tax than residential properties. Another advantage is that land is available at most locations with different sizes; this makes it easier to invest in small portions and keep increasing the investment according to your savings. The primary challenge with this investment is that there is very little return versus the effort required in the short term. Geological surveys and other maintenance parameters might add to original purchase costs. Entering into land investment can be substantial due to many reasons. Few reasons why you should think about investing in land are:

•It is ‘Hands-off investment’
You don’t need to worry about too much of an extra cost for the upkeep of the area. In a residential property, one has to worry about maintenance, tenants and other issues. With land investment, you only have to worry about its management or minimal maintenance to prevent encroachment.

•Future plan
With vacant land, you will have many options like selling it, building your house, building commercial property or convert it into farm land. The sense of liberty is limited with residential properties like apartments or houses.

•Value addition for long term
Land investment is more affordable than residential property. With less need for maintenance, you will save a considerable sum of money. However, land investment can be tricky and also fraught with risks. In order to ensure safety of your venture, you will need to be mindful of a few things before investing:

Before you start research on your land investment options, take time to pan out your budget. Make a checklist:

•Evaluate your savings and income
To begin with, estimate your savings and debt-income ratio should you be availing of financing for this venture. Other investment instruments like fixed deposits or mutual funds, which are more liquid in nature might also be a good source of financing. Together, analyse the amount you will be investing along with the amount you will be left with. Investors should be careful while investing as the liquidity in land investment is less as compared to gold, fixed deposits and mutual funds.

•The amount you are willing to invest
After all the calculations estimate how much amount you will invest in land and keep in mind any legal or maintenance costs.


This is probably the most crucial step in successfully investing in land. Exploring and collecting information regarding the investment is an essential step in making the right location and developer choice. Learn more about market trends and the news related to the area you are interested in. This information will add up to your overall knowledge regarding the sector and will aid your decision-making.

•Market trends
Investigate further on the recent market reports and trends in the real estate sector. Keep an eye out for news related to price, popular investment plots or areas, investment options, type of land investments and details on whom to contact.

When you are planning your different plot options, compare them on the basis of the amount and the quality they offer for that amount.

•City/ State development
City or State development can be a game changer. For example, Gurgaon, now a leading financial and industrial city, was a village up until the 1990s. Similarly Koramangala in Bengaluru, was once called Sollemangala (Solle means mosquitoes in Kannada) due to its remote nature but is now bustling with commercial and residential hub.

•Government policies or legal issues
The plot may be under litigation or may be due for a government project.

Also note that a few areas may be categorized as forest land or can be in a coastal regulation zone. Investigate and enquire about these factors before you invest. All the information you will obtain from local municipalities and development authorities.

Plots situated near to a well-developed city or an airport, railway station or business sector will be a great investment. This venture will also secure employment opportunities. Try to invest in areas in the proximity of such sectors, this will ensure maximum future returns.

Every metro and Tier II city has its growth corridors. Even tourist spots can be good investment destinations. If you want to steer clear from these variables, then make sure you invest in a location which provides you basic amenities at a good price.

•Workforce and labour
If you are planning to build a house or commercial property on the land or sell it to a developer, keep in mind the potential for employment prospects. If the plot is near a developed segment, the employment options will be aplenty.

•Public transport and amenities
If you are planning to develop estate on the land, it’s better to search for amenities like public transport, water supply, hospitals etc.

•Scope of growth
Always invest in land where you see possibility of growth and development. This judgement will be easier if you thoroughly research your options.

How long can you stay invested?

Plan out your long-term goal. Land is not a liquid asset and the efforts are considerable when it comes to finding a buyer at a fair price. Make sure you have an alternative source of income or savings that you can bank upon during times of crisis. Your land investments will gain on capital appreciation when you sell the land. Long-term goals like child benefits or a retirement corpus are more suited to land investments. Planning will help you maximise returns and turn your venture into a success.

Remember, turning ignorance into knowledge and action is more a factor of your approach rather than purely focusing on the negatives and challenges of possible outcomes. We will explore more land investments in the upcoming parts of this series. To learn more about investing in land, contact an expert member of the Asset Quest team today!

Investing in Land for Retirement: What You Need To Know

Choosing how to save for retirement can be a decision that takes years. After all, that’s the money that you’ll be living on during your golden years. Most people stick to 401ks and stocks, but what many people don’t know is that you can invest in land real estate to save for retirement. Investing in land real estate can be a great way to save money long-term, but with any investment, you need to know what type of land to invest in, what sort of returns you can expect, and what to avoid when investing in land real estate.

There are many benefits to investing in land real estate. One benefit is that if you invest in land in different areas, you will be protected if certain properties are hit by natural disasters or the value of one type of land real estate drops. Geographic and commodity diversity can keep your money safe even in a rocky market. Another benefit is that land real estate (farmland in particular) sometimes have higher returns than stocks do. Most stocks can be expected to produce a six to seven percent return over time), while farmland has produced a steady 11.5 percent annual return over the past twenty five years.

If you are looking for a low-maintenance investment, vacant land is a great option. It is cheaper to buy than developed land, and you don’t need to spend money doing repairs or renovations. While this is an excellent investment to make in the long-term, you will have to be patient. This investment will take time to make money. You’ll also want to keep an eye on the market to make sure you’ll be able to sell it at the best possible price. Consider looking into vacant land properties in areas that are seeing an increase in population or jobs. This land will is likely to become more desirable over time, and you’ll be able to sell it at a higher price than what you bought it for originally.

When investing or buying vacant land, you should always know who you are buying from.Be careful of people who have only owned the land for a short amount of time and seem very eager to get the land off their hands. Vacant land takes times to accumulate value, so it’s suspicious if people only own it for a short amount of time. The owners might know something about the land that makes it less valuable. This is a perfect example of why it is so important to find an agent with the expertise and experience needed to conduct land real estate transactions – like an Accredited Land Consultant (ALC).

Timberland or forestland are also excellent long-term investments. The returns for timberland real estate tend to move counter cyclically to other markets.  Because of this, it will add portfolio diversification, lowering the risk of losing money. Timber is also a hearty crop that can provide you with returns for many years.

You should invest in timber or forest land only if you are planning to retire ten or more years down the road. You’ll have to spend money to plant trees and won’t get returns as they grow, but once the trees reach maturity, they will provide steady returns.

Although investing in land real estate to save for retirement is an excellent option, there are some key factors to look out for. Keep the following in mind while you look at different properties:

-You need to know the land inside out. You need to know everything about the land you are investing in. This means zoning, mineral rights, any environmental hazards on the land, usage restrictions, access easements, taxes on the property, and the likelihood of natural disasters in the area. If you think you are asking too many questions, you are not. Even small issues can end up costing you a lot in the long term. For example, you could have an incredible property with full mineral rights, but if the soil drainage is poor, the value of the land could drop so dramatically that any other positive factors wouldn’t matter at all. Finding an ALC near you can help ensure that you see the whole picture when it comes to investing in a piece of land.

-You need to be crystal clear on the taxes. This was mentioned in the previous bullet point, but it’s so important we added it again. Some properties have taxes that are so high that the taxes eat up any returns you make on the land. Speak with your land agent about this and make sure you understand what your costs will be before investing in a property.

-Are there wetlands on the property? Thanks to Waters of the US (WOTUS) and other laws, if you have wetlands on your property, huge parts of your land might not be useable. This could cause the value of your land to drop dramatically.

Investing in land real estate can be a great way to save up for retirement. Land real estate is a valuable and limited community that, historically, continually grows in value. If you do your research and spread your investments out over a few different types of land, you could have a successful start to saving and creating a well-balanced, diversified portfolio for your retirement. Want to learn more? Contact an expert member of the Asset Quest team today!

Is Raw Land a Good Investment?

Land is one of the most solid investments available. It will always be worth something, and there’s little chance of it being stolen. Raw land is undeveloped property with no buildings or other structures — it is still in its natural state. If you’re thinking about investing in it, the trick isn’t so much about buying at a good price but selling at the right time for a good profit. Investing in raw land is for people who can afford to wait years until someone comes calling for the land. It’s not a good idea for people who want to do a quick flip or need to develop an immediate income stream.

Location of Property

Raw land values increase at a faster rate at the center of a growing city or around the perimeter of cities. But, any raw land in an area showing population growth is worth investment consideration because such growth attracts developers. The whole idea of investing in raw land is to choose property that will appreciate in value and attract a buyer who will pay more for it down the road.

Raw Land vs Developed Property

Investing in raw land is less costly than buying developed real estate in the same area simply because there are no improvements on raw land. However, banks are a bit more cautious about fronting money for raw land that is not being used for any income-producing purpose and will usually ask for a higher down payment — sometimes up to 50 percent of the land purchase. On the other hand, mortgage loans typically require a 20 percent down payment or less. Land loans also have shorter maturities — 10 to 15 years versus 30 years for mortgage loans. You can also expect to pay higher interest rates for raw land than you would for mortgages.

Purchase Timing

Economies at all levels are vulnerable to boom and bust cycles. Local economies are often tied to a major industry. The area may have a spike in population growth and lots of land and home sales for several years. Those boom years are followed by too much product on the market and a sharp decline in sales. You are more likely to make money on raw land if you buy during the bust cycles and sell during the boom cycles.

Pitfalls of Raw Land

Be leery of buying from owners who have held the property for only a short time, especially if the owner is a builder or developer. If they’re trying to sell fast, it likely means they have inside knowledge that the land isn’t as valuable, or won’t be as valuable, as they thought. Raise another red flag on any property priced too low for the market. That can mean the land has fallen outside the path of progress.

You also need to visit the land itself, even if it means a road trip. Never invest in raw land based solely on photos in a slick sales brochure. Do a thorough investigation and don’t allow a high-pressure salesman to rush you into a decision.

Are you ready to start looking into land as an investment? Give Asset Quest a shout today to learn more!


Buying Land? Here’s What You Should Know!

The dream home you and your family envision moving into might not exist. If that’s your dilemma, you have the option of having your house built from scratch. After you have an idea of what you want your new home to look like, you’ll need to work on securing the land that you want your house to stand on. Here’s what you need to know about buying land to build a house.

What to Do Before You Purchase Land

If you’ve decided to buy land, keep in mind that it’s not going to be a short-term project. Buying land is a major undertaking and to begin the process, you’ll need to figure out how much breathing room you’ll have in your budget for a new house.

Some of the costs you’ll have to account for include fees, permits, the cost of purchasing the land you need, the cost of building your house and the cost of having to make adjustments to the land in order to have access to running water and other utilities (if that’s not already in place for the land).

Choosing the Right Land

Once you have a budget in place, you can start your search for a plot of land. A quick internet search can show you where land is available in your region.

Confused about what to look for when buying land to build on? You’ll need to find an area where zoning laws won’t keep you from buying land for the investment property or home you want to build. Zoning rules set restrictions concerning things like the size of buildings and the kinds of businesses or residences that can be built.

It’s also a good idea to make sure that the land’s soil doesn’t prevent you from building, digging a well or getting electricity and natural gas. Will the land’s elevation be an obstacle? Are there any liens on the land or environmental problems that need solving? These are some examples of the types of questions you’ll need to answer before you can prepare to buy land.

While it’s possible to buy a house or a plot of land without the help of a real estate agent or broker, it can help to have someone on your side who specializes in working with vacant lots. A real estate professional can hold your hand through the entire process and help minimize hiccups. If you’re opposed to using an agent, it’s important to find a real estate attorney who can address your legal concerns.

Ready to get to purchasing land for investment purposes? Contact the expert team at Asset Quest today!

Land As A Quality Investment

Discussions of real property investment normally focus on single-family homes, multiple-family dwellings and commercial properties. Land rarely enters into the conversation, even though can often bring higher returns. Anyone can buy land, but there is far less competition than trying to land a stock or other investment that other people are vying over. And since real estate investors tend to sway towards apartments and homes that they can rent, you’ll be stuck in fewer bidding wars and will be able to negotiate on price.

Investing In Land

Why choose land over classic real estate investments? There are many practical reasons.

Land is usually low-maintenance. You rarely have a tenant, which means you won’t be receiving midnight calls on a Saturday night because of a broken toilet. You also won’t have the aggravation of trying to evict the seemingly-nice couple who refuse to pay rent and have trashed your property. In most cases, you’ll rarely (if ever) have to even visit your property.

The second consideration when investing in land is financing. Getting a loan for any real estate investment can be difficult these days, as financial institutions’ easy money policies died with the recession of the late 2000s. Although it is often more difficult to obtain financing for land investments than it is for a primary residence that’s actually a good thing, because it has made seller financing the standard in land sales.

Seller financing is a boon for investors because terms are highly negotiable. Unlike a bank, a seller is likely to consider you a qualified buyer as long as you can prove you have sufficient funds to make the down payment and at least a few monthly installments. They’re often this lenient because they’re motivated to move the property. They’d certainly prefer to receive a lump sum payment, but most are happy just to establish a cash flow if they can’t negotiate payment in full.

Property taxes are another advantage to purchasing vacant land. You’ll only be paying tax on the land itself and not on structures, so your total yearly bill will be substantially lower. Taxes on large parcels can still be a drain, however, so be sure to take property taxes into account when evaluating land as an investment.

Know that you know some of the advantages are you ready to get investing? If so, give Asset Quest a call today.

How To Know If Raw Land Investing Is Right For You

Raw land investing has become increasingly popular among real estate investors over the last decade. Raw land (i.e. vacant or undeveloped land) is a great way to earn and maintain steady cash flow, but it isn’t necessarily the perfect option for every type of investor.

Real estate entrepreneurs come in all different shapes and sizes, and with all different goals and aspirations; however, there is one common trait they all share: the desire to be their own bosses and rid themselves from the confinements of their nine to five jobs. Because there is such variety among the real investing crowd, it makes sense that not every investment opportunity will benefit every investor in the same way. Rehabbing properties might work well for one investor while another, equally successful, investor might have better luck with buy and holds. Does this make either investor better than the other? No. Quite the opposite, in fact. Because each investor knows how to play to his or her strengths, they both excel in their individual niches.

So, will raw land investing be your new niche? Consider the following four items before making that decision:

To Attempt Raw Land Investing Or Not To Attempt Raw Land Investing, That Is The Question

It is fairly safe to say that when Shakespeare wrote his famous lines for Hamlet, “to be or not to be, that is the question”, Hamlet was contemplating whether or not to take a stab at raw land investing. Determining your niche as a real estate entrepreneur is, after all, a pretty life altering question to ask.

All jokes aside, deciding which path to take in the world of real estate investing is something every investor should put a lot of thought into. It is important to ask yourself the right questions and do the proper research before jumping into a particular niche so that you set yourself up for success. The ability to designate yourself as “man (or woman) in charge of your own destiny” and call your own shots sounds pretty enticing, which is why most people want to start a career in real estate investing; however, if you want to run a stable, profit-producing business, it is crucial to not jump in the deep end of investing too fast.

This is where raw land investing comes to play. If you are a person who is just getting their feet wet in the real estate investing pool – or even if you’ve been running your own successful investment business for years – making a raw land investment is a great place to start or expand your business. If you like property that is relatively inexpensive, low maintenance, and can produce significant cash flow, undeveloped real estate is about to become your new best friend.

The great thing about investing in raw land is that there is virtually no competition, which is perfect for those whose negotiation skills aren’t quite up to par. Most real estate investors get so caught up with rehabbing, wholesaling, and rental properties, that they fail to see where another great opportunity lies: raw land. Land is a limited resource, so those who own a piece of it are considered to be highly valuable, especially as raw land becomes more and more scarce. It can be purchased for fairly cheap, and once you own some, there isn’t much you have to do. The beauty of land is that it acts as the ultimate buy and hold. There are so many ways to make money off of raw land as well. You can rent your land out to farmers or hunters, you can develop it, or you can simply let it appreciate and sell it down the road as land becomes even more limited.

Okay, so now that I’ve got you intrigued, it is time to analyze yourself so that you can decide whether or not raw land investing is right for you.

  • Can You Manage Risk? Although raw land investing tends to be predictable, as with any type of investment, there is always some risk involved. If you are the type of person who is easily overwhelmed by the unknown or conversely, you are someone who jumps into things hastily, raw land investing is not a niche you should pursue. When you invest in a plot of land, you are essentially predicting the future. The moment you put money down on the table, you are saying, I believe that what I am buying into will increase in value overtime. While, in theory, you are probably right – land is limited and the human race will always need more space to develop – there are some things that are out of your control. Suppose a natural disaster strikes and your land gets flooded. Perhaps a fire ensues and burns the crops of the farmer you are renting to and he or she decides to stop paying you. Although these are rare scenarios, they are not impossible and therefore, as an investor, you must prepare yourself for the worst. On the other hand, if you are an adrenaline junky who is drawn to risk like a moth to a flame, it is likely you could make a investment decision based on feelings over facts.
  • Are You Financially Organized? When it comes to raw land investing, more than likely, you will not realize a profit as fast as you would if you were rehabbing or wholesaling properties. Because of this, it is crucial that you are vigilant about organizing your finances. This should not, however, deter you from undeveloped real estate. Because raw land is a buy and hold investment by nature, it can be awhile before your land appreciates enough to produce cash flow. If you are a novice investor, you must perform an honest evaluation of where you stand financially. If you are a seasoned investor, you must assess the state of your finances in terms of your current investments and how you want your business to grow. If you are inherently frugal and make money saving a hobby, it is likely that you will realize success as a raw land investor.
  • Will You Prioritize Research And Due Diligence? Raw land investing is all about asking the right questions, and if you’ve never purchased vacant land before, you are probably not up-to-date on the jargon and terminology. Before investing in any land, it is vital to first research the market. Has there been recent development in the area? Is your plot of land in the path of future growth? If the answer is yes to either of the above question, your property already meets some crucial criteria. Next, you should talk to your lawyer, the seller, and you inspector’s about the zoning on the property. Are there clear boundaries drawn on the plot? Is it zoned for commercial, residential, industrial, mixed-use, or agricultural development? What was the land used for previously? Asking and getting specific answers to all these types of questions is an absolute must. Also be sure to ask questions about the land’s topography, required annual taxes, available public utilities, usage restrictions, and road access. Minding due diligence and researching the right questions is what sets apart the successful raw land investors from the not-so-successful raw land investors.
  • Do You Have Support? Unfortunately, raw land investing – or any type of real estate endeavor for that matter – is no “get rich quick” plan. It takes a lot of hard work and perseverance to realize success in the real estate investing world, which is why a solid support system is crucial to have. While it is important to rely on yourself as an entrepreneur, your own personal cheerleader is nice to have when times get tough. Whether this be a business partner, fellow investor, or family member, as long as you have someone to talk through your decision making process with, you are more likely to be successful compared to someone going into raw land investing alone. If you are having trouble finding your support system, consider joining a local REI group or even create your own meetup.com group. Isolate yourself from the naysayers and negative nancy’s in your life and find people who are there to help you stay motivated.

If you’ve answered yes to at least three of the above questions, consider raw land investing as your next business venture. If you’re ready to take the next step, contact an expert member of the Asset Quest team today.


Orlando housing market heats as home prices outpace wages

With Orlando home prices rising six times faster than wages in the last year, competition has revved up for condos and townhouses, a new report shows.

The smaller, more affordable residential options represented just 12 percent of the 3,508 home sales in an area of mostly Orange and Seminole counties last month. But prices of those units rose at more than triple the rate of single-family houses during the last year, according to a new report by Orlando Regional Realtor Association.

What the market has essentially done is come full circle with rent versus purchase, and right now, the pendulum has swung to purchase.

Condo and townhouse prices have spiked to the point where developers will likely look at building another condominium tower in downtown at some point during the next two years as average sales prices continue increasing above $300 a square foot. It’s been about a decade since the urban core saw a new condo tower.

The mid-point price for a single-family home in the core Orlando market during March was $249,900, which was up 6 percent from a year earlier. Prices for condominiums and townhouses were about half that amount and increased more than 19 percent during that time.

Stress on buyers continues to mount in Central Florida with midpoint wages of $58,406 remaining roughly flat for the previous yearlong period, while home prices have grown about 6 percent. Interest rates remained flat from a year earlier and edged down slightly to 4.29 percent in March from February.

In addition, the supply of listings has shrunk to near-record levels of 2.2 months, which is down from a year and a month earlier.

From a month earlier, the overall median price for all types of Orlando-area housing in March was largely flat at $230,000 despite the downturn in supply. Sales were also relatively flat from February.

Orlando’s housing market continues to be tugged by opposing factors, such as low inventory and high demand.

Of the four counties in the Metro Orlando area, only Osceola showed an increase in year-over-year sales with 5.9 percent growth. Lake County sales declined 4.4 percent; Seminole County was down 3.7 percent; and Orange County sales slipped 2.9 percent from a year ago.

To learn more about the Central Florid real estate market, contact 9 Core Realty.

Realtors say NABOR’s latest numbers don’t come as a surprise

Sales of homes above $1 million in Naples during the first quarter of 2018 drove the market, increasing 61 percent compared to the same quarter of 2017, according to the First Quarter 2018 Market Report released by the Naples Area Board of Realtors. NABOR tracks home listings and sales within Collier County (excluding Marco Island).

January’s results led some to question expectations for the year when compared to last, yet in February the market gained its stride, accelerating in March with closed sales shooting ahead to end the first quarter on a very impressive note. According to NABOR monthly reports, January had 672 closed sales, February reported 672 closed sales, but March kept agents very busy with 942 closed sales, driven by a strong high-end which included a number of new construction condominiums just delivered.

Pending sales in the first quarter of 2018 increased 3 percent to 3,177 compared to 3,097 in the first quarter of 2017. Although pending sales for both single-family homes and condominiums over $1 million increased by double digits, it was the $2 million and above condominium market that raised eyebrows among brokers who reviewed the reports.

Tourism was up in our area this season compared to last year, so it’s not surprising that we would end with strong pending sales for the quarter. But experts weren’t expecting to see a 109 percent increase during the quarter in pending sales for condominiums over $2 million.

Coco Amar, a managing broker at John R. Wood Properties, said the condominium market offers some very good investment opportunities, especially at both ends of the market. “The top and bottom price categories are where both the inventory has grown and the prices have dropped.”

As reflected in the market’s year ending statistics (the 12 months ending 1Q 2018 versus the 12 months ending 1Q 2017), there was a 69 percent increase in closed sales of condominiums in the $2 million and above market, and a 17 percent decrease in the median closed price to $2,450,000 from $2,962,000 in 2017. Despite rocket sales in this high-end sector during the 1Q 2018 (179 percent increase) and a drop in median closed prices for the first quarter (24 percent decrease), the inventory increased 5 percent. Similarly, median closed prices for condominiums in the $300,000 and below price category dropped 1 percent to $199,000 from $200,000 in the first quarter of 2017, but inventory increased 3 percent in 1Q 2018.

The NABOR First Quarter 2018 Market Report provides comparisons of single-family home and condominium sales (via the Southwest Florida MLS), price ranges and geographic segmentation and includes an overall market summary.


Florida real estate market healthy but challenged

The Florida real estate industry is healthy, though several thorny challenges confront residential sales. Last year, foreign buyers bought $23.8 billion in Florida real estate, more than double the figure from a decade ago. Seventy-three percent of those 2017 purchases were all-cash because wealthy international buyers don’t need mortgages. The foreign property purchases account for 11 percent of the value but only 6 percent of the sales volume, indicating those purchases were primarily high-end homes.

The top international buyers of U.S. real estate last year came, in order, from China, Canada, Mexico, India and the United Kingdom.

Although most of the Chinese purchases were in California, the Florida market certainly has a larger share of foreign investors.

The state is also raising the confidence of foreign buyers with safe property investments that are bound to appreciate.

At the same time, the trend lines indicate a decline in international buyers.  The potential outcomes of higher tariffs on Chinese imports and the impacts of NAFTA’s demise on Mexico could boomerang on the U.S. and cause a global recession.

During the first quarter of 2018, a rising number of households expressed more confidence in the economy and their financial position, but only 68 percent of consumers felt now is a good time to buy a house, the lowest percentage in two years.

Income, debt and anxiety are stopping some from buying. The very, very competitive nature of the current residential market — with inventory down 13 percent, prices up 9 percent and mortgage rates expected to rise again — is being met with caution.

From 2011 to 2017, income grew by 15 percent but housing prices surged by 48 percent. This is a big concern for renters and an obstacle to converting to home ownership.

Consumers should not wait for mortgage rates, at 4.5 percent now, to fall, not with the Federal Reserve forecast to raise its benchmark interest rate two more times this year and three in 2019. Two years from now, mortgage rates could be 6 percent. Don’t take the current rates for granted.

While national existing home sales rose last year to their highest level in 11 years, the pending home sales index has stalled and inventory continues to fall.  Builders have been under-producing and the annual increases in construction since the subprime disaster have been very minimal.

To invest in the Florida real estate market contact an expert member of the 9 Core Realty Team today!