What Are The Costs To Hold Land

11 Replies

I have recently been looking into buying land in certain up and coming areas and wanted to find out if anyone was experienced with buying land. What costs and regulations (in general) are associated with holding land since on a $15K piece of land or so the margins are obviously tight? I am looking at land in PA (Pennsylvania mostly Philadelphia and New Jersey NJ.

Depends on the land , it may require mowing , people may dump trash  etc .

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That all depends on the land , it cost a bit more to mow 1/4 acre than 10 acres ?  Its all different

You are responsible for the taxes each year as well. I would just get in contact with a vendor and see what they would charge to mow it once a month. Should not be anything outradgious.

@Nicholas Crum

I was more worried about insurance. Taxes are normally small and easy to find, ditto mowing. Its the hidden cost that I was more worried about like environmental assessment, insurance etc. the stuff you can do with out and be ok 99 times and get killed the 100th. 

@Kenneth B.

I am always happy to look at anything though I will tell you it does not really fit with what I was looking at. 

My parents held land, well a residential lot, for 10+ years and it was a terrible investment for them from the stand point that it was a tax burden (albeit small) with no cash flow.

In another case, a friend has acres of land around his house which is in a quasi-farm area. He figured out that local farmers would love to collect the hay in exchange for a fee. He makes a nice little cash flow from the deal. Won't make him rich but it's cash flow he would not otherwise have with that land.

If you are willing to pay the taxes and any maintenance (i.e. mowing) if any, I would highly suggest putting the parcel in a land trust and/or holding insurance on it to protect from liability. I title literally everything in land trusts with my company as the beneficiary so as to protect us from any liability in a lawsuit since we self insure.

Taxes are my biggest cost, which is why I try to keep my land inventory low. Or better yet with a house on it that rented out to cover some of the costs!

Land is a wonderful asset but its not a productive asset unless your doing something with it.

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