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May 21 '09, 05:25 AMThe world of land investing can be daunting for the first time buyer. In this series of articles I will be presenting some of the things to look for when purchasing land. While these articles will not answer every question you may have, they will provide you with a solid foundation of knowledge in which to grow. If you have a specific concern please feel free to contact me directly, I would be happy to offer further assistance.
An Overview:
First… Intent.
Why are you buying land in the first place? Is it for future use? A place to build a second home or are you going to retire there? Is it for investment purposes? Are you looking to hold it for several years and then sell it? Keep in mind that your initial reasoning behind your purchase may change. It is quite possible that a lot you had bought for an investment with the intention of selling in 5 years ends up being the perfect place to build your ideal getaway. Something like that is always a possibility. But, knowing why you are looking in the first place helps in the decision process. For example, if you know the property will be for future use, then strong emotions could come into play when buying it. As the locale for you and your family where memories will be created, "falling in love" with a property can trump the logistics, numbers, and logic involved in making a decision. While letting emotions influence your decision is OK, you still want to research what it is your buying so that later down the line, the "love" isn't replace with "hate". For example, you buy the property and build your 3,500 sq foot dream home on it. Later you realize that there are no protective covenants in the community… the reason why your next door neighbor set up a single wide on his/her lot. On the other hand if your goal is investment and investment only then emotions need to play a less prominent role. For example, you find an excellent priced lot in a wonderful community near a major city with all the amenities. The numbers all work and work well. If you view it and feel, "Ehh, ho hum" and then pass on the opportunity completely based on those emotions, then you could be letting many great investments pass you by.
Second… Know Your Resources.
Purchasing land has been a solid and stable way to create wealth for decades. But, as with any investment an inherent risk is always involved. Take the time to look over your finances. Know your spending limits before you head out and begin actively gathering information on parcels for consideration. Research what options are available to you and look into alternative methods of funding. For example, with the volatile stock market many people are now discovering that they can use their 401ks/IRAs for land investment purposes.
Next Article: Research and Compare.
I would like to follow up on this NEWBIE Overview Series with more posts that go into greater detail on the particulars of land purchasing. Please comment and leave any ideas, concerns, or questions that you have to assist me in making these future posts as helpful to you as possible...thanks!
