A lot of people know that property can be an amazing investment. It fact, it’s probably the first thing that people think about when you bring up investments! But what about land? We usually imagine property as a building in an urban area. We usually don’t even imagine ourselves owning anything on the outside at all!
But the ownership of land instead of or in addition to a building can bring you some amazing opportunities. You do, of course, have to be very careful with how you go about it. Here’s a quick guide to getting land and getting it ready to generate profit.
Avoiding debt could be vital
Afew decades ago, land was the most lucrative investment of them all. A lot of people owned land, mostly for agricultural reasons. But there were a lot of chances for failure. That’s because the safety of land was often at risk. Things like plague, drought, pestilence, bugs, fires were often ruinous to landowners. Nature didn’t seem to have their best interest at heart!
But these days, it’s not any of those things that make up the most common cause of land failure. The most common cause of an agricultural business failing is debt. If you can get into land ownership without going into debt, that’s best. Most people will have to borrow money, however. So some debt will probably be necessary. In general, avoid debt as much as you can.
Will you have enough time?
A lot of people think that land is pretty low maintenance. Sure, they know that it’s a big natural resource. They know that some care has to be taken. But, in general, people think it’s easy enough to just leave it for long periods. That land is less of a chore to own than a house.
But land of any type often requires more management tasks than people think. So you need to assess what you’re planning to do with the land and ensure you’ll actually have enough time! This may not be something you can just pursue on the side while you work another job.
The uses of your land
If we want to talk about this very broadly, there are three main uses one might make of land. They fall into the categories of operational, recreational, and boutique. This is especially true if you’re looking to buy a ranch. The operational use will include the vast majority of agricultural use. You’ll need the resources to house workers and animals.
Recreational will see you invite guests to your land as part of your business model. In this way, many may list the business as a resort. So you would have to consider lodgings and recreational activities. Boutique ranching is less its own category and more of a combination of the two!
Considering useful markets
So how far away from amenities or markets is the land you’re eyeing up? This is extremely important to consider. It’s going to determine several things. If you’re looking to live on the land, then you need to know how easy it will be to get your everyday resources. If you’re looking to build a business on the land, you need to know if there are useful markets nearby.
A farm or a ranch will need good distribution channels. And if you’re miles away from the nearest sales opportunity, then you may find yourself putting in a lot of time, energy, and money into even the most basic business operation.
Working with the right agent or broker
Buying land isn’t easy. This is probably something you could have guessed for yourself. But some people, again, may assume that the process is somehow easier than that of buying other types of property. (For example, a home or an urban commercial property.) But there’s so much involved in the process of buying land. Most people really don’t understand the quality metrics completely.
This is why it’s important that you seek help when it comes to acquiring land. Just like someone buying other types of property will need a real estate agent or broker, you will need a similar service. Who you work with may well depend on what you want to do with the property. If you’re looking to buy any kind of ranch, for example, you may want to work with a company like Ranch Marketing Associates. This can help you ensure you get the right land type and location for what it is you’re looking to do.
You need to consider what facilities with land actually comes with. If you’re just buying completely bare land, this may not apply so much to you! Still, a geological inspection may still be useful. Knowing what sort of things you need to look out for when buying bare land is essential. After all, you’re going to need to know how to get water and electricity to the land for whatever it is you want to build. As for other types of land, you need to consider things more from an infrastructural point of view.
What sort of equipment actually comes with the land? Are there any irrigation systems? Are you looking to have several fenced areas or have land focussed more on outbuildings? The geological factors may cause problems either way. Make sure everything is properly inspected.
Generating a passive income
There are loads of things you could do with raw land that can generate you an income. If you make the land suitable for camping, then you could build a nice public camping site that people can pay to use. You’ll have to make sure it meets state regulations for camping sites, of course!
You could also look into building a property that could be used as a vacation home. This will allow you to rent the home out to any vacationers who love the land. You could even rent the land out to someone who wants to own a ranch, if you’re not going to take one on yourself!