Land is one of the most stable and reliable investments you can make.
What makes land such an excellent investment? And what does the land development process look like should you want to invest?
This blog post will discuss the top reasons to invest in land and the land development process. We’ll also reveal an “easy button” that serious real estate investors can use for investing in land.
5 Reasons Why Land Is Such A Valuable Investment:
- Land is a physical asset that you can touch, feel, and see. As a tangible asset, land makes a sustainable and trustworthy investment strategy.
- It’s a limited resource; there is only so much land in the world, so it will never go out of style or become irrelevant like some of the fad investment strategies that rise to viral trending status one day and plummet to complete nonexistence the next.
- In the words of Mark Twain—“Buy land; they’re not making it anymore.” With the population growing, many more people will want a piece of the pie, and the price of land will only continue to go up as we’ve seen to be true in recent years.
- Land is an excellent investment because it appreciates in value over time – often faster than other investments like stocks or bonds.
- Developing land can produce income through renting or leasing and be sold for a profit later down the road. Most land developers regularly buy, develop, and sell land as an investment strategy that provides an ROI for all onboard investors.
All things considered, buying land is a wise investment decision that comes with plenty of benefits. With that said, there’s a lot to consider regarding the land development process.
What Does The Land Development Process Look Like?
When compared to traditional real estate investing, land development requires a bit more time, research, planning, and foresight.
While it can be a daunting task, developing land can be a lucrative endeavor for investors willing to put in the time and effort.
This is one of the primary reasons why the majority of investors choose a more passive investor role when it comes to investing in land. We’ll share more about this particular “easy button” in just a moment.
First, let’s look at the land development process.
The Land Development Process Can Be Broken Down Into Six Key Steps:
- Research: The first step is to do your research and identify potential development opportunities. This means looking at factors such as the location, zoning restrictions, and infrastructure availability.
- Feasibility Study: Once you’ve identified some potential development sites, you’ll have to conduct a feasibility study to determine whether or not the project is viable. This includes assessing the market demand, evaluating the competition, and estimating the costs of development, as well as the estimated revenue and your overall return.
- Financing: If the feasibility study shows that the project is feasible, you’ll need to secure financing. This may involve taking out a loan, partnering with other investors and land development groups, or seeking government grants.
- Planning and zoning: The next step is to develop a plan for the project and obtain all of the necessary permits and approvals from the local planning authorities. This process can be pretty complex and time-consuming, so it’s essential to have patience and prepare for delays.
- Construction: Once all the planning and zoning approvals are obtained, the construction phase begins. This often includes horizontal development, such as utilities, roads, and curbs—and then building the actual property or selling the property to builders or developers.
- Marketing & Sales: It’s hard to find buyers without doing any marketing. Your marketing strategy plays a critical role in the ROI you’ll receive after you’ve sold the land.
The “Easy Button” For Investing In Land
A significant amount of time and planning goes into the land investment process from start to finish.
Essentially, developing land is a 3 in 1 investment strategy that includes purchasing the land, building / new construction, and ultimately selling or renting the end product.
With land development being a complex investment strategy, it requires a significant amount of planning, time, and resources. This is one of the key reasons why most investors opt to play a more passive role in the land development process by investing in projects with experienced real estate development groups.
This is where our team at Red Oak Development Group comes in…
Red Oak Development Group is one of the fastest-growing real estate development firms in Austin, Texas, and our portfolio is continually growing to keep up with the booming demand for housing.
Our primary focus is on land development, mixed-use development, and single-family development in and around Austin, Texas, and Flagstaff, Arizona.
If you’re interested in investing in land, we’d love to schedule a call to tell you more about the land development deals we currently have in progress.
