You might have heard hundreds of times: “land is limited, and land investments are rewarding.” Undoubtedly, land investment is a beneficial option for beginners and expert investors.
When we talk about land investments, we generally assume buying an off-grid land parcel and holding it for a few years to achieve higher appreciation. The common belief is, big-budget is critical to succeeding in land investments. Nonetheless, in reality, having a ton of money is not always a prerequisite for land investment. You can invest in land with a small budget and earn enough profits by taking wise steps strategically. If you are eager to know how to invest in land with little money, you’ve come to the right place. Let’s dig deeper into the topic!
First things first, Even if you are on a shoestring budget and dreaming of investing in land, the simplest way to find the low-priced land is by listing sites. Plenty of land listing sites available, in which you can find and purchase a property that has not been sold for over a year. Other listings go very quickly when you work with a reputable private land seller. Look out for a financing option if you get the best deal and understand the necessities. Apart from that, We’d recommend you asking for property access or requesting a delayed closing so that you can save funds to purchase the land.
The idea of choosing land as an investment is tempting. Likewise, buying land with little money. It may take longer than expected. To ensure you don’t run out of options, we’re going to discuss other lucrative real estate investment options.
Quick Overview- Types of Land Investment
Land investment is different with well-funded investors as they have plenty of choices and the budget to support it. They can purchase land for recreation, building a house or investment without breaking the bank. Now, you must be curious about what land ownership opportunities are available for investors with a tight budget? How can they find the right piece of land to invest in and get a decent return within budget? What to know before buying land? To get a better understanding of this, you should be aware of some land investment categories.
- Residential development land
- Mineral production land
- Row crop land
- Commercial development land
- Livestock-raising land
- Vegetable farmland
- Recreational land
Residential and Commercial Land Investments
Both residential and commercial land investments can be lucrative and can deliver higher returns. For small investors, there are plenty of land development opportunities that satisfy their budget and time constraints. Real Estate Investment Trust or REIT is an excellent choice for small investors, as it is very low-priced, doesn’t need direct management, and can be obtained or sold on a real-time basis. These investments, however, prevent landowners from using the land freely. If you want to experience land ownership, residential and commercial development can be your choice.
Row Crop Land and Land for Livestock
Your next investment option is buying land for running a livestock operation or row-crop farming to use your land freely and generate constant income. Still, there are complications investors need to deal with; the overall cost of operating livestock is high, making the investment riskier. It’s more likely the large-scale farming operation will put extra stress on a landowner. Thus, it’s recommended to small investors to avoid large-scale operations.
Many small investors may not like the idea of traditional row-crop or farming operation. For them, agricultural investment options can be profitable as it offers exposure to farming enterprises. To give you an idea, some funds provide exposure to coffee, wheat, cotton, sugar, Kansas City wheat, canola oil, corn, cattle, cocoa, lean hogs, and soybean meal, feeder cattle, and soybeans.
If you are interested in investing in specific traditional farming operations, use exchange-traded notes (ETNs). You can leverage exposure to soft commodities, including sugar, cotton, coffee, corn, wheat, and soybeans, with iPath Bloomberg Agriculture Subindex Total Return ETN (JJATF). Besides that, Small investors can appropriate investment exposure to cattle and hogs by iPath Series B Bloomberg Livestock Subindex Total Return ETN (COW). There are some risks involved in these investment options. Thus, thorough due diligence is crucial to know potential risks and rewards to safeguard your funds when making such investments.
Small Farm Investment Opportunities
Small investors who desire steady cash flow and want to enjoy land ownership must invest in timber farms, recreational land, orchards, mineral development lands, and vineyards. Such investments pay off as investors get the opportunity to adjust the scale of purchase and generate a stable income stream. Investors might consider Exchange-traded funds (ETFs) and Exchange-Traded Notes (ETNs) for small-scale farming operations.
Issues to Consider
Investors need to recognize the legalities linked with the use of a land type before deciding to invest in raw land. Land- restrictions can create a stumbling block to effective use of the land. You better be aware whether you will need an easement to get access to your property or get a conveyance of mineral rights to bring out and sell minerals for profits. Besides that, A landowner can get access to adjacent waterways with riparian and littoral rights. Small investors should also find out annual property-tax obligations, access to electricity or telecommunications, trespassing violations, etc. Considering these issues, prospective landowners should perform extensive due diligence assessments before purchasing land.
The Final Word
A well-planned land investment saves you from risks associated with investment and ensures you reap maximum benefits after selling a property. A variety of ETFs and ETNs are accessible to investors. All they need is to wisely select and utilize the investment products.