People started exploring different types of land to buy since real estate has emerged as the safest investment opportunity.
Investing in land is one of the most powerful strategies to make money in 2024. Over the past few years, demand for land as an investment has experienced an uptick. From 2023 to 2024, there has been an increase of 155% in rural land sales. This growth is due to the stability that comes with purchasing a piece of land.
In the market when investment is a subject of risk and uncertainties, is land a good investment? Certainly, land investment is considered a less risky and profitable choice as compared to other forms of investment. There are many benefits of land investment, especially avoiding many of the complications that can come with other types of investment.
If the concept of investing in land is new to you, and if you are still carrying a doubt is buying land a good investment? Then take a tour through this article and discover the exciting world of land investment and the different types of land available and learn which one of them would be the best investment for you in 2024.
Table of Contents
Benefits of Investing in a Land
Before we begin to explore the types of lucrative land investments, let’s learn about the many benefits of investing in raw land.
Limited Supply:
Land as a commodity is finite, you can’t produce more of it. And since there is a limited amount of developable land available to invest in, the price of land will only continue to rise. Therefore, if you hold a land investment, you will see great returns in the future.
No Hassle or Upkeep:
No construction! No refurnishing! No repairs! No maintenance! And no hassle with tenants! Owning land as an investment does not come with any of these normal issues. Once you purchase it, sit back, relax, and watch your investment grow.
Less Competition:
There are several types of land to buy but most of the investors opt for houses, apartments, and other developed properties. As a result, there is often major competition in this segment of real estate investment. Alternatively, the world of raw land investment has less competition. You can purchase a piece of raw land at a very affordable price, making the initial investment inexpensive.
In addition, owning raw land provides you the flexibility to either develop or resell it for a higher price. As market conditions do not affect land investment but many investors wonder if it is now a good time to buy land. However, it is advised that other factors should be considered during investing in real estate.
Types of Land Investment to Look Forward
Real estate investors are served with several types of land to buy or invest in.
However, a doubt remains the same in the buyer’s mind, among all the options what is the best type of land to buy? The selection of the land depends on economic growth, market demand, and personal finance goals.
Here is the list of types of land you can consider as an opportunity-
1. Farm Land:
With the agricultural market increasing, investing in farmland has emerged as a profitable opportunity and many consider it to be the best land investment. Per statistics, farms have an average of 11.5% yearly return. Plus, having your money locked in farmland investment will settle out your risks and will generate a passive income source.
So, now is the right time to capitalize on the return from farmland investments. You can invest in farms for both crops and livestock, either directly or via farming-related companies.
2. Subdivision Development:
This involves purchasing a large piece of land and then subdividing it to build multiple houses. Subdivision development is an effective strategy to add value to your land. More parcels of land mean more profit. When you divide the land into smaller pieces, you can sell it to different buyers and keep some for yourself.
Additionally, finding buyers for small divisions of land is much easier as compared to finding buyers for a large developed property. However, when selecting this land, ensure city services are extendable to the area at competitive prices.
3. Commercial Development:
Another great land investment option is to convert raw land into a warehouse, storage facility, factory, mechanic shop, or shopping complex. Likewise, you can develop your raw land into an array of things to generate multiple sources of income. However, make sure to gauge the potential of commercial land based on your preferred development work.
Accessibility, location, and necessities available on or near land are some of the many factors that you must consider. These factors will clarify if land is a good investment or not right now.
For instance, if you are likely to open a shopping space, then road access to shoppers living in proximity would be of prime importance.
4. Recreation:
Using raw land for recreational purposes comes with a range of both personal and financial benefits. It is an affordably priced long-term investment. When you invest in recreational land, you get the opportunity to earn income as well as use the land for entertainment purposes.
This way you optimize land usage, make money, and hold the land that increases value over time. There are several ways you can use recreational land. You can develop it into a weekend getaway spot, your new favorite fishing location, a community garden, an outdoor family retreat, or even a place for camping, hiking, riding ATVs, and much more.
5. Greenfield land:
It is present in both urban and rural areas and comes with many benefits at lower prices. As demand for land is increasing, greenfield land is gaining popularity. This land can generate high-value appreciation in the long term. This approach benefits companies due to tax reduction as it holds advantages for investors as well as for the nation.
6 Transportation:
It can be a strategic investment approach for high appreciation value. Investing in transportation land offers several advantages for investors seeking strategic and lucrative opportunities. Transportation land is a lucrative investment opportunity as it is an essential part of infrastructure projects. The transportation development projects will never stop as it is essential for better accessibility and connectivity. Investing in transportation land will gain substantial appreciation value over time.
Good nearby connectivity increases the land demand. Similarly, the demand for transportation increases in areas where infrastructure development is potentially high. Additionally, the government’s initiatives to improve transportation land can benefit investors. This investment is a blend of demand, support, and an abundance of promising opportunities.
7 Residential:
Residential land investment is a sound approach associated with various advantages. With the high graph of population growth, the demand for homes is constantly in demand not just in urban but in rural areas as well. Investing in land in a prime location has the potential of building houses or residential complexes that can significantly give a high appreciation value. Investing in residential land is considered less risky in comparison with other real estate investments.
Best Places to Invest in Real Estate
Now that you are familiar with all the different types of land, it’s time we go over the location. A few places are worth considering due to their anticipated price hike. Here are some recommended best places to find affordable land for sale in the USA in 2024.
Here are some best places to buy land in the US based on analyzed trends:
- Oregon
- Arizona
- Florida
- New York
- Nevada
- Wisconsin
Ways to Earn Profit from a Land Investment
If you have made up your mind to invest in raw land and are still confused about what types of land to buy and don’t have a concrete plan in place, here are a few ways you earn profit from your land investment.
Buy and Hold:
This is a long-term strategy and is likely to be more profitable than other real estate investments. If you are considering this approach then it is now a good time to buy land and start your investment journey.
As the price of raw land has the potential to increase in the coming years, buying and holding it until the areas surrounding your land develop can earn you attractive returns. You can purchase the land and hold it for years until it offers you viable returns.
Lease to a Farmer:
Another effective way to maximize your returns on raw land is to lease it out.
If you are fortunate to get a good deal on a piece of farmland, go for it without a second thought. Historically, farmlands have yielded better returns than bonds, stocks, mutual funds, and other types of investments.
Furthermore, statistics say that the capital value of farmlands has risen by 4.6%. And when taking income generated from the lease into account the average annual returns amass to 11.8%. That’s quite a lucrative return.
So, by leasing the land you are possibly going to get a good return, which will even help you cover up your tax and insurance costs.
Lease to a business:
Many businesses look for raw land to conduct their business operations. They lease the land for a long duration and pay you the rental amount on a monthly or yearly basis. Several types of businesses might be looking for land, these may include pet sitting, animal breeding, or ones needing huge storage lots.
Apart from this, you can also lease your raw land for other purposes. These include billboards, ranchers, and cell tower installation. Lease is a pretty good and straightforward way to make a regular income with your raw land.
Buy Low, Sell High:
As cities grow, raw land emerges to be one of the strongest real estate investment avenues. If you can purchase land at a lower price during market lows and then sell it later when the price spikes, you can generate a substantial profit. In this condition owning land is a good investment and it can give you high returns.
Additionally, you can also develop your raw land into something more to increase its value and utility. You can use the same piece of land to develop multiple entities to increase your income sources.
Final Words
The options covered above are the most popular types of land investments, but they are not the only ones.
There are many options out there that can offer you profitable returns. However, regardless of the type of land investment you choose, it is recommended you do your research before making a decision. Alternatively, you can find trusted real estate guidance with APXN property where market experts help and guide you in the right direction.
Remember, buying land is a good investment and it is not built into an overnight money-making scheme. Instead, it requires a robust strategy, research, and investment to gain profitable long-term results.
