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With the real estate market more competitive and volatile than ever, finding a foothold as an investor can seem daunting. High interest rates, escalating home prices, and the constant search for that ‘diamond in the rough’ property have many new investors throwing their hands up in frustration before they even start. 

But what if I told you that there was a way to enter the real estate market with minimal risk and a low financial barrier to entry? 

Four Benefits of Buying Vacant Land as a Real Estate Investment

Enter vacant land—a seemingly overlooked avenue of real estate that’s regaining popularity among savvy investors. 

Here are four compelling reasons why vacant land might just be your golden ticket into the real estate industry in 2024.

Vacant Land is a Lower Risk Investment

While traditional property investments can be quite risky, vacant land offers a more stable platform for entering the market. This is primarily because the barriers for selling land are lower—there are typically no buildings to maintain or tenants to manage, and as such, fewer variables that could potentially lead to financial loss. Even if you hold onto the land for an extended period, your financial exposure is generally limited to the property taxes, which tend to be significantly less than those for developed properties.

Given the low entry cost and risk-averse nature of land investments, it’s an appealing first step for new investors. You’ll not only learn the ins and outs of property ownership, but you’ll also start building an investment portfolio that can serve as a foundation for more substantial real estate ventures.

It’s Less Costly to Buy Vacant Land

It’s no secret that the cost of entry for most real estate ventures is sky-high. However, with vacant land, you can sidestep many of the upfront costs associated with structures. In addition to purchasing the land, all you may need is a modest budget for surveys, due diligence, and any required land improvements.

Consider this—while a plot of land in a prime location may be pricey, the overall investment will likely be significantly less than a traditional property in the same area. For aspiring investors on a budget, this opens up doors that may have been previously closed, allowing for a foothold in the market that can grow with the investor’s financial means.

Vacant Land Has No People Problems

One of the more discouraging aspects of real estate investment can be the human factor. Dealing with tenants, their concerns, and the upkeep of a property can be a time-consuming and sometimes thankless task. On the flip side, vacant land requires none of this day-to-day attention.

Instead, land investment is more about sitting and waiting for surrounding property values to increase. It’s an investment in the potential future value of the land, rather than any immediate returns. For passive investors or beginners who don’t want the added responsibility of property management, vacant land offers a hands-off approach that can be an attractive, low-stress entry into the market.

Low Property Taxes

Property taxes serve as a perpetual cost of any real estate investment, but with land, these are typically much lower than those of developed properties. In some cases, you could be paying as little as a couple of hundred dollars annually, depending on the parcel’s location and size. For example, in parts of New Mexico, it’s not uncommon for land investors to pay less than $200 a year in taxes for a typical 40-acre plot.

This low yearly commitment makes holding onto land a sustainable long-term investment. With tax burdens at a minimum, holding onto the land for future development or simply waiting for the right time to sell is a financially manageable prospect.

Is Buying Vacant Land Good for Beginner Real Estate Investors?

The real estate market can be unforgiving, especially for novice investors. With high mortgage rates and housing prices, it’s a challenging landscape to enter. However, for those who are looking for a way in that is both relatively affordable and low risk, the allure of vacant land is hard to ignore.

By choosing to invest in land, you can avoid many of the pitfalls that have long plagued real estate investors. With no structures to maintain and low property taxes, the ongoing costs are minimal. Furthermore, it’s a relatively straightforward process that can be an educational and profitable endeavor for those willing to learn the ropes.

Ultimately, the decision to enter the real estate market with vacant land is a personal one. It’s vital to conduct thorough research, understand the local zoning laws and market dynamics, and perhaps consult with a real estate professional to ensure you make the most of this opportunity. Whether you’re looking to start your investment portfolio or diversify your current one, vacant land investment in 2024 may just be the ticket to success in the real estate market.

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