Real estate investment has always been a leading investment. You can invest in San Antonio condos for sale or single-family homes to generate immediate income. Or you can purchase vacant land.
According to top realtors in San Antonio buying land is a safe and most preferred real estate investment.
Why you should buy vacant land?
- To build your own dream house or a farmhouse.
- To use it for parking purposes.
- To develop a residential township, a vacation rental, or commercial property and generate quick and easy income.
- For farming, hunting purposes, or to set up a poultry farm.
- To rent it to travelers on sites like Hip camp.
However, as it is rightly said that, before plunging into any real estate investment a proper evaluation is required, the same applies to land investment too. Proper guidance from top realtors in San Antonio is valuable and helpful. Like other financial investments, investing in the land also has certain definite pros and down lines.
Below listed are a few pros and cons of buying vacant land:
Pros
Cheap and affordable:
Buying vacant land is far more affordable compared to a constructed property. Also, the cost of buying vacant land and building the property in your desired way ends up being far cheaper than a finished property. Vacant land is a cheaper long-term investment as property taxes are also lower as compared to developed land. So investing in vacant land is more fruitful as you can buy it today and develop it later when you have a larger budget.
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Flexible:
As stated above a vacant land has multiple uses. Adhering to the zoning laws and depending on the size of the land you can design the property according to your preference. You can have a swimming pool at the back or a smaller or larger yard. There is also an option of selling the land to a developer and enjoy profits on each sale. Another flexible aspect is that you need not physically visit the property before purchasing it. As nothing is built you can ask your real estate agent to upload the photos and videos of the land and close the deal remotely.
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Low maintenance cost:
The cost of maintaining vacant land is far less than a constructed property. Vacant land requires no repairs or renovation. The only maintenance cost incurred is mowing, fencing, and hiring a guard for surveillance.
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Long-term appreciation:
A constructed property undergoes depreciation and may also fall in despair if not maintained properly. Unlike a constructed building, vacant land value appreciates over the years. Land remains in the same condition in which you have bought except for natural impact caused due to weather, erosion, or earthquake. Also, vacant land can be sold with increasing profits as compared to houses for sale in San Antonio. The reason is that the supply of land is limited which ensures higher competition.
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Easy to buy:
The process of buying land is simple and straightforward. Most lands are purchased with direct cash and you become a direct owner. There is no stress on mortgage payment and interest rates. Banks do not grant finance on undeveloped land so in case you require financing the seller himself provides the finance at a lower rate of interest.
Cons
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No immediate cash flow:
A vacant land is cheaper and affordable but the return on investment takes a long time. Unlike, a building you do not earn a quick and regular rental income. Since there is no immediate cash flow you are burdened with the payment of property tax. So until you are not ready to develop you can cover the expenses by selling a parcel of land, renting it for parking, leasing it for farming, or allotting gaming or mineral rights.
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Zoning restrictions and requirement of permits and approval:
Zoning restriction makes it difficult to develop a property as per your desire. So with the help of San Antonio real estate agents, thorough research should be conducted regarding what property can be built on a particular land. Thus, zoning restriction determines how much return you can earn on your investment. Also, if zoning laws allow the development of a particular property you still require permits and approvals. This results in a lot of waiting around.
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Illiquid investment:
Availability of finance is not easy for purchasing vacant land. As banks do not grant finance, you have to invest all your savings for buying land. And also after building property if it does not sell easily, your money gets tied up and the land becomes an illiquid investment. Also, as the land appreciates at a faster and higher rate it is not sold easily. San Antonio condos are sold easily. But it is challenging to find a buyer willing to pay a higher rate for vacant land. This takes a lot of time and the land turns out to be an illiquid asset.
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Physical issues:
It is important to have a look at the history of the land. A topography and soil report will ensure whether you can build a property or not on the acquired land. Also, the land should not be prone to floods or a hilly and steep area. It is difficult to construct as well as sell houses built on such land.
Apart from keeping in mind the above pros and cons you should also find out the reason behind selling the land. This will save you from investing in an illiquid asset.
Conclusion:
Buying vacant land can be the easiest route to a profitable investment only if proper homework is done. Connect with the best realtors in San Antonio to invest in vacant land to enjoy fruitful returns in a long run.