As a landowner or potential landowner, you may be wondering how to make the land really work for you. You want to generate profits from the land, but how? In our latest post, we discuss what to do with land in Richmond.
While many people buy land to add to their portfolio, with big plans to profit, there are other people who have inherited or otherwise acquired land in Richmond but aren’t sure if they should hold on to it or sell. Every piece of property is different. Some can generate income, some should be developed, and other pieces of property should be resold, with the profits generated from the sale invested elsewhere. The right piece of land can be a very profitable and versatile investment when you know what to do with it. Below, we will offer 4 things you can do with land in Richmond.
Imagine the profits you could potentially generate from one small piece of dirt. By taking a look at the property’s highest and best use, you’ll be able to determine just how the property should be developed in order to generate the highest profit. You could potentially buy a lot for a few thousand dollars, build an economically priced house, and resell for a profit of thousands. You could also turn it into a rental property, helping to generate income for years to come.
Maybe you have the opportunity to buy low and are confident you will be able to resell the property at a profit. There are investors who specialize in this, buying and selling land as their main investment niche. It is easy to get started and the risk is relatively low. While this situation might seem like a no-brainer, you should always have a backup plan in case the sale falls through. Luckily, the costs to own land are not very much. But if you were counting on those profits to pay for another investment, you may be out of luck.
Yes, people rent out their land. In fact, it may be more common than you think. Take a look at where the parcel is located. Could it potentially be used as parking for local events? Could a nearby business utilize it as designated parking solely for their customers? Other uses for leased land include farming, hunting, camping and even to your neighbor who may want to add the additional property. Before you attempt to lease out the land, make sure it is zoned accordingly. You don’t want to lease it to a business, only to find out they aren’t able to do what they had intended with it.
Take a look at what the market is doing in the area. How has land been performing in comparison to other investment types? Has there been a steady rise in prices or has land value in your area stayed relatively stagnant? If you are deciding whether to hold or sell, you’ll want to learn about future development and how it will affect property values in the area. Development in the area could increase the demand for land, leading to a bigger payday for you. However, you’ll want to watch for rising property values. With higher values come higher taxes. Will these taxes be a factor for you? How long will you have to hold to see a profit? If you will need to hold for a long time before making any money, the taxes incurred should be factored into any potential profit.