Where is the market for raw land hot?

23 Replies

I want to buy some raw land for $100,000 and have it increase by 50,000 in two to three years. I have heard it done a lot. How do I find out current trends and forecasts for lands in the United States. Where is hot?

One of my Real Estate instructors (who has achieved a certain measure of success), once said that the trick to buying raw land was in determining which way the city was growing. He also stated that it might be a good idea to learn how to fly in order to gain perspective. For what it's worth........just thought I would pass it on. :superman:

Really the only other way is research. Find out what citys are going to be rebuilding and cleaning up the city. For instance i live in florida and Pompano Beach started putting millions into cleaning up the city new streets, Plants , trees, parks, making the commercial buildings owners update the buildings. Or like Newark NJ they are putting somthing crazy money into the city. But i think you would be better off buying a property for $80k putting $20k into it and then selling it for $150k in a few months.

That is just my 2 cents it would be better to use the money and turn stuff over quick even if you make $25k on your $100k in 1 year.. 2 years $25k each year is your $50k and you might beable to flip more then 1-2 propertys a year. hope i helped

IMO, Land appreciation is always speculative even when you know there are projects that may increase the value.

However, I suggest you look for areas where there are major projects planned. Example: In my area, Panama City, FL we are about to undergo a huge growth spurt. A new international airport is slated to begin construction next year which will replace our current airport. You can imagine what has happened to land values surrounding the airport site.

What many have forgotten however, is while the land values around the slated airport has gone sky high, there are other good land investments outside the area.

Realizing an areas growth potential is very important and speculative.

Hope this helps ;)

The Phoenix metro area is a good place. But with 100K, you'll have to go pretty far out but you can buy some acreage - and could possibly make your projected increase in value in 3 years. I would suggest your buying land in any area or state to go look at it and do due diligence before buying it. There's nothing more worthless than a worthless piece of land. Check all aspects like access, is it buildable, water, electric, flood areas, how much is usable, city codes, etc. Stay away from the 40 acre/0%down/low monthly payment land. Good luck!

Texas rural land is hot in value. Both for recreation and outside bigger cities. You do have to pick a spot and then just sit and watch it. I think the best are rural properties that can become commerical within a few years.

Originally posted by "natecarrlaw":
I want to buy some raw land for $100,000 and have it increase by 50,000 in two to three years. I have heard it done a lot. How do I find out current trends and forecasts for lands in the United States. Where is hot?

Sure, this was very common over the past several years but there is no guarantee land prices will escalate at such a rapid pace now that the housing market has finally slowed down. If I was you I would check out population trends and isolate counties and cities that are projected to grow the fastest. The Census bureau website has these statistics. You should also read the quarterly OFHEO government report on housing, there is a new one that will be released this week. Good luck.

Natecarrlaw - if you're trying to find a place to start looking at rural land values you can begin at www.landsofamerica.com. This will give you a good taste for what land is going for in many states. It all depends on where you want land and how much you are wanting to spend.

Good luck in your search and keep us updated on how it goes.

Originally posted by "ashannon":
Natecarrlaw - if you're trying to find a place to start looking at rural land values you can begin at www.landsofamerica.com. This will give you a good taste for what land is going for in many states. It all depends on where you want land and how much you are wanting to spend.

Good luck in your search and keep us updated on how it goes.

Thanks thats a great site i will added it to my favorites.

We've been building a directory of rural land sites . . . this should be helpful as well:
http://www.biggerpockets.com/farm-rural-land.html

I live in Gilbert Arizona. There were plenty of opportunities to do that and even more a year and a half or so back. Right now the opportunity still exists because of Phoenix projected growth but it might take a couple of years for the market to swing back. Currently there are some amazing buys cropping up in the outerlying areas like Queen Creek (Suburbs of Phoenix) and places on the outskirts of Tucson Arizona.

We personally have some property for sale in Queen Creek and Marana Arizona. The two acres in Queen Creek are tremendous buys at the current price. We have one acre and a quarter lot that is four lots down from an upcoming Whitewing community with homes going in that are going to be 800k to 3 million in value. The road is currently not paved but with the whitewing going in the road is set to be paved by the end of the summer. When that happens any lot on Magma, that is the road that is going to be the entry point for the subdivision is going to see big increases in the next two years. We bought the lot in Feb of 2005 for 110,000 per acre and we currently have it listed for 185,000 (we have dropped the price from 225,000 in the last six months due to the downturn in the market)

Anyone that purchases this lot at this price will certainly see a 50k increase in the next 2 years and possibly more. For those that can wait longer or build a spec home could see increases even bigger than that.

We also have another lot on a road not to far away from that called Silverdale that we have dropped to 135,000. This lot could also see tremendous appreciation in the next three years based on the custom homes that are going up in the area. There are some very big developments planned that are starting to go in like Whitewing, El Pedregal and Quintana Hills estates that are going to have 1 Million dollar plus homes in them.

Many people are not aware of the big developments going on. If you have a Realtor or access to the MLS you can check out both properties. We feel they are undervalued and priced to move in the current market with big potential in the future. We are not going to build on them so we would like to sell them to people that can either hold for a couple of years or build on them. Those that do have a good chance of being rewarded handsomely.

Right now there is a lull in the market but make no mistake, within the next five years Phoenix is going to see an upswing due to the massive growth that is going to come in.

I live in Utah where property gives in investors a great return, my husband is a developer as well we just purchased some land, for a large amount but the return if we sell it raw would be at least 1 million or if we develop it would be about 4 million. your best best if you find some property is to do some research, the quickest and easies way is to go to the city the property is in and check the master plan, (at the city planners building) they have a master map of what they project for the city for the next few years and you can find out if the area you are looking is panned use is.

Originally posted by "cdtcgordon":
I live in Utah where property gives in investors a great return, my husband is a developer as well we just purchased some land, for a large amount but the return if we sell it raw would be at least 1 million or if we develop it would be about 4 million. your best best if you find some property is to do some research, the quickest and easiest way is to go to the city the property is in and check the master plan, (at the city planners building) they have a master map of what they project for the city for the next few years and you can find out if the area you are looking is panned use is.

There are two important points in this post.

1. You have to do your research and understand what is likely to happen. The community and region will have published development plans so it is not like anyone is hiding the information. At the same time these are planning documents that go out 20 years or more. How and when development actually happens is not guaranteed.

2. It take serious cash to buy land and wait. It is hard to borrow from a lender to buy raw land. The LTV will be low and many lenders just do not want to be bothered. The issue is the land has limited value as is and there are costs but no real income.

Later when the deal is more predictable then the lenders will step in with construction financing.

In many places the folks investing in raw land are either farmers primarily or they are people with more money than things to do with it.

The really savvy investors use options and other ways to tie up land without having to put a lot of cash into what is a black hole until the future arrives.

John Corey

Originally posted by "REI":
Originally posted by "cdtcgordon":
I live in Utah where property gives in investors a great return, my husband is a developer as well we just purchased some land, for a large amount but the return if we sell it raw would be at least 1 million or if we develop it would be about 4 million. your best best if you find some property is to do some research, the quickest and easiest way is to go to the city the property is in and check the master plan, (at the city planners building) they have a master map of what they project for the city for the next few years and you can find out if the area you are looking is panned use is.

There are two important points in this post.

1. You have to do your research and understand what is likely to happen. The community and region will have published development plans so it is not like anyone is hiding the information. At the same time these are planning documents that go out 20 years or more. How and when development actually happens is not guaranteed.

2. It take serious cash to buy land and wait. It is hard to borrow from a lender to buy raw land. The LTV will be low and many lenders just do not want to be bothered. The issue is the land has limited value as is and there are costs but no real income.

Later when the deal is more predictable then the lenders will step in with construction financing.

In many places the folks investing in raw land are either farmers primarily or they are people with more money than things to do with it.

The really savvy investors use options and other ways to tie up land without having to put a lot of cash into what is a black hole until the future arrives.

John Corey

This is true. We just started investing in Raw Land when the market took off in Phoenix. Within the first year we saw some amazing increases but we wanted to hold it due to taxes at least one year. Then we ran into that sort of (not had it long enough and the market started cooling off a bit phase). We are now learning that in some cases you might have to hold the land for 10 years. This is OK if you are a cash only investor and do not have any land loans or things of that nature to finance the land. If you have been doing it for a while and or you have made some good deals and have a the ability to pay cash for the land then there is no pressure to wait unless you need the cash. If you are beginning and are speculating with loans it can be more risky and it is smart to have the stability to pay the loans with some cash on hand for emergency situations. My brother began investing in land about 11 years ago in Queen Creek and Northern Arizona in a town called Heber. He is just now really beginning to reap those profits from that and he has done really well and is beginning to reinvest those profits into other things. This is what I would call round 2 for him, but he went through several years of hard times where he had to hold and sometimes the outlook was grim. Overall though everyone knew that Phoenix was going to grow and they are not making more land, so if the city is growing and jobs are being created there is a good chance building is going to to take place and raw land is going to be developed but research is key. I live here so I know this market and I have seen the growth over the past 10 years. Acres in Gilbert Metro and Chandler Metro go for 280-400k per acre especially in custom subdivision lots. You can see that as the building pushes out the same thing is going to happen farther out, but you have to be careful that you do not get outside the commute area because you might not see those same types of increases. Based on that analysis I would be leary of investing in raw land in a place that I did not know very well. You almost have to live there to understand the market or you need to have some very good technical analysis and right now there is nothing like that available. Or you could hook up with a good realtor in the area but you would be betting a tremendous amount on his or her knowledge and what they feel is going to happen.

At the end of the day there is no better place to invest than the area you live in. If you live in a growing area then you can invest in your own backyard.

This is true. Land values her have increased so much and the prediction here is 40k home in the next 8-10 years.A large Portion of the homes hear are custom and lots range from 200k to 1 million an acre depending on where you are. We are lucky enough to have several large companies located in the middle of the boom. Newways, Tahitian Noni, Newskin, Alcoa, these companies provide numerous jobs, both corporate and blue collar. Also with all the construction, this too has provided a large demand for employees. This help with the growing population. The problem is land owner continually increase prices due to the demand, sometimes to much. We try, if we are selling to a developer to stay pretty low, most of the land we sell not developed help with the cash part of developing other projects that we have going at the time. Payroll fuel materials ect.

Originally posted by "cdtcgordon":
This is true. Land values her have increased so much and the prediction here is 40k home in the next 8-10 years.A large Portion of the homes hear are custom and lots range from 200k to 1 million an acre depending on where you are. We are lucky enough to have several large companies located in the middle of the boom. Newways, Tahitian Noni, Newskin, Alcoa, these companies provide numerous jobs, both corporate and blue collar. Also with all the construction, this too has provided a large demand for employees. This help with the growing population. The problem is land owner continually increase prices due to the demand, sometimes to much. We try, if we are selling to a developer to stay pretty low, most of the land we sell not developed help with the cash part of developing other projects that we have going at the time. Payroll fuel materials ect.

That is the way it was here in 2005. During that time we sold our existing house and then bought and sold another custom within 5 months for about a 50% increase in the sale price. We sold it in 3 days. The demand was so high that the supply was down so low that things were selling in the first day and bidding wars were breaking out. I have never seen anything like it. Now though it has flipped back in the opposite direction and a major correction occured. Lots are beginning to pile up all over the place and the prices have decreased. That presents a major buying opportunity for land lots for those that can stomach the risk. The growth is not going to stop in Phoenix anytime soon. I believe Maricopa county is still the fastest growing county in the U.S. and has been so for few years now. The simple fact of the matter is though that prices shot up to fast to quickly and the demand surged and then dropped. Now the excess inventory must be swalloed up before we begin to see major upward movement again. There are pockets of protection though around major subdivisions that should see continued upward movement regardless of what the market does over the next two years.

Where are you located at?

We live in Spanish Fork Utah.Just south of Provo. We just sold our home in Lehi. We just got our home plans finished and were going to buy a lot here in Spanish Fork but in the 6 months we been here things are too crowed so we are looking to buy somewhere else, probably birds eye, somewhere where development is not so fast.

Originally posted by "cdtcgordon":
We live in Spanish Fork Utah.Just south of Provo. We just sold our home in Lehi. We just got our home plans finished and were going to buy a lot here in Spanish Fork but in the 6 months we been here things are too crowed so we are looking to buy somewhere else, probably birds eye, somewhere where development is not so fast.

Have you been buying any raw land or are you just looking at building a custom home?

What is the appreciation like on raw land there?

There are some amazing opportunities to build here as well right now with the big decreases in land prices, but right now things are bottoming out. We are going through the bottom cycle of a correction with the boom really happening in 2005. They are saying next year prices are going to rebound when all the inventory begins to get swallowed up. That is if the foreclosures are not to bad. That only adds to the problem.

It is really supply and demand out here. There is a glut of supply and the demand has dropped, but that opens the door to opportunity if someone had cash laying around. They could make a number of amazing buys that would possibly turn into big returns in five years. Anyone building a custom home to live in for 2-3 years could get land much cheaper now than they would have been able to 1.5 years back.

Originally posted by "cdtcgordon":
This is true. Land values her have increased so much and the prediction here is 40k home in the next 8-10 years.A large Portion of the homes hear are custom and lots range from 200k to 1 million an acre depending on where you are. We are lucky enough to have several large companies located in the middle of the boom. Newways, Tahitian Noni, Newskin, Alcoa, these companies provide numerous jobs, both corporate and blue collar. Also with all the construction, this too has provided a large demand for employees. This help with the growing population. The problem is land owner continually increase prices due to the demand, sometimes to much. We try, if we are selling to a developer to stay pretty low, most of the land we sell not developed help with the cash part of developing other projects that we have going at the time. Payroll fuel materials ect.

Did you say 40k over the next 8 to 10 years?

In 2005 people were seeing that in two months out here.

I would say anyone that builds a custom home out here now would see gains of double or triple in 9-10 years.

For example, if you bought the lot we have by whitewing for 185k and built a 3000 square foot home for 110 a square foot that would put you at 515,000 in cost. It would appraise for probably 600-700k immediately. Whitewing homes are generally worth over a million plus within two years of being built (this has been the trend in every other subdivision they have built up) Because of the location being surrounded by 800k to million dollar homes it would push the value of the custom home on this particular lot up and within 3-5 years I believe it would be worth 800k plus... especially when the market comes back to normal during 2008-2009. Within 10 years this home could literally be worth 1.5 million.

That would be a 1 million dollar gain within 10 years.

This is not far fetched at all in a rapidly growing area like Phoenix.

This does not happen everywhere but in subdivisions like Whitewing and Circle G ranchers it has happened frequently.

We are in a correction phase right now though. Good time to buy though as people are unloading properties at lower prices.

Originally posted by "ashannon":
Texas rural land is hot in value. Both for recreation and outside bigger cities. You do have to pick a spot and then just sit and watch it. I think the best are rural properties that can become commerical within a few years.

Right now we're seeing a great amount of appreciation in the Southern Travis County and Northern Hays County in the Austin Area. Austin is growing extremely fast. Just last week The Wall Street Journal and Moody's Economics named it the best city in the US for its economy. Builders are making money here so as Austin expands land values are increasing. I could send you statistics if you would like.

Originally posted by "Austin Realtor":
Originally posted by "ashannon":
Texas rural land is hot in value. Both for recreation and outside bigger cities. You do have to pick a spot and then just sit and watch it. I think the best are rural properties that can become commerical within a few years.

Right now we're seeing a great amount of appreciation in the Southern Travis County and Northern Hays County in the Austin Area. Austin is growing extremely fast. Just last week The Wall Street Journal and Moody's Economics named it the best city in the US for its economy. Builders are making money here so as Austin expands land values are increasing. I could send you statistics if you would like.

Could you list a breakdown of good subdivision lots cost now and projected value in a year?

Also could you give an estimate of 5-10 acre parcel cost that might turn into good lots for development down the road.

We had a couple of friends that are moving to Austin this month. He bought land about three months ago and says that it has already increased over 25k in value.

Do you have any information you can send?

Originally posted by "natcon":
Originally posted by "Austin Realtor":
Originally posted by "ashannon":
Texas rural land is hot in value. Both for recreation and outside bigger cities. You do have to pick a spot and then just sit and watch it. I think the best are rural properties that can become commerical within a few years.

Right now we're seeing a great amount of appreciation in the Southern Travis County and Northern Hays County in the Austin Area. Austin is growing extremely fast. Just last week The Wall Street Journal and Moody's Economics named it the best city in the US for its economy. Builders are making money here so as Austin expands land values are increasing. I could send you statistics if you would like.

Could you list a breakdown of good subdivision lots cost now and projected value in a year?

Also could you give an estimate of 5-10 acre parcel cost that might turn into good lots for development down the road.

We had a couple of friends that are moving to Austin this month. He bought land about three months ago and says that it has already increased over 25k in value.

Do you have any information you can send?

If you did not get my PM, go to my web address below then click on contact and I will email you all of the stats and info and what my suggestions would be.

Originally posted by "Austin Realtor":
Originally posted by "natcon":
Originally posted by "Austin Realtor":
Originally posted by "ashannon":
Texas rural land is hot in value. Both for recreation and outside bigger cities. You do have to pick a spot and then just sit and watch it. I think the best are rural properties that can become commerical within a few years.

Right now we're seeing a great amount of appreciation in the Southern Travis County and Northern Hays County in the Austin Area. Austin is growing extremely fast. Just last week The Wall Street Journal and Moody's Economics named it the best city in the US for its economy. Builders are making money here so as Austin expands land values are increasing. I could send you statistics if you would like.

Could you list a breakdown of good subdivision lots cost now and projected value in a year?

Also could you give an estimate of 5-10 acre parcel cost that might turn into good lots for development down the road.

We had a couple of friends that are moving to Austin this month. He bought land about three months ago and says that it has already increased over 25k in value.

Do you have any information you can send?

If you did not get my PM, go to my web address below then click on contact and I will email you all of the stats and info and what my suggestions would be.

I find it interesting that some markets are affected by the down cycle but others are not. For example, Austin and parts of NM seem to be unaffected to an extent by the downturn that came after the major runup in prices.

Do you see any sort of a downturn there or has it progressively up over the past 2-3 years. I have heard that Austin sort of resembles what Phoenix was prior to 2005 in many ways in terms of opportunity. Is that true or do you really have to be careful in where you invest in terms of location or particular subdivision. For example, if I bought a lot in a good subdivision what could I expect as the subdivision began to develop out in terms of return?

Thanks,