Land investments are a fast and simple way to start your real estate portfolio. However, every piece of land is different. To find the piece of land that is right for you, ask yourself these questions first!
Land investment is very popular as many new investors are beginning their portfolios and finding success through land. This type of investment is an attractive option because of its relatively low start-up costs and little to no overhead.
Question 1: What is the end goal of your New Orleans land investment?
No matter what kind of real estate you’re investing in, always run projections to help you calculate how much revenue a property will bring in. Unless you lease it out, land doesn’t usually make money if it’s just sitting there. Most investors buy low and then sell the land when a profit is made. You can build additional income for yourself by repeating this process and streamlining your methods. Make sure you set goals before you invest. What do you want to achieve with the land in both the short and long-term? Will the property produce the returns you are looking for?
Question 2: How is the location?
Whether you plan to develop or resell the land, it should be in a desirable location. A remote location isn’t likely to increase in value as fast as a location that is in demand. To learn about any future developments that may occur near the land you want to buy, research county information.
Question 3: Are you aware of all current and future zoning?
Zoning obviously has a huge impact on what you can do with the land. Research the area around the land as well as the property itself. A residential lot may not have the same resale value if it’s next to a commercially zoned lot.
Question 4: How much land do you need?
How much land will you need to buy? Whether you’re looking for a single residential lot, a large commercial lot, or a large parcel to subdivide, make sure it’s meeting your needs!
Question 5: How will you purchase investment land in New Orleans?
Determine how you’ll pay for the land before buying it. The process is a bit different for obtaining a loan than it is for getting a traditional mortgage. Many people use cash to pay for land. If you are not using cash, look out for buyers who are. They can be some tough competition when offers are being put on the table. Many people prefer the ease of a cash sale.
Question 6: Are there any building restrictions?
Before considering the question below, find out if there are any building restrictions on the lot. Even if you aren’t developing the lot yourself, the person you sell it to might want to. It isn’t easy to sell undeveloped land that you can’t build on. Bad soil and rare animals living nearby are both examples of things that can prohibit building.
Question 7: Do you plan to develop the land yourself?
If you want to develop the land to add value, run your numbers first to make sure you are aware of all the costs. There could be leveling, soil testing and many other costs aside from the actual building itself. While developing the land yourself might require a hefty investment up front, it can be highly profitable in the long run.
Question 8: Will you be able to generate any income from the land itself?
If you’re holding the land to sell when the value goes up, there are things you can do to make some cash in the meantime. Depending on the size and location, you can lease the land to a nearby business for parking, or lease the land for recreational uses.
Question 9: How quickly is the land appreciating?
Have you been tracking the land’s value over time? Observe past value and sales records to see if it is appreciating at the rate you would like it to. If the value is stagnant, you may want to find a different lot for your investment.
Question 10: Will you be able to resell it quickly?
You should have an exit strategy in place for every investment you make, no matter what it is. With land, you can choose to resell, develop, lease, etc. Just ensure that your way out is viable and will bring you the cash you need when you need it.
If you are looking for land in New Orleans, we can help! Find out how buying direct can save you time and money! Send us a message or give our team a call today to learn more! (504) 224-9066