Buy vacant lot next door to single family?

Question

I’m looking at a single family home purchase for the purpose of renting it out long term. The owners owns the adjacent lot and I could get a decent deal on it as a bundle.

What are people’s thoughts on this scenario? I want to BRRRR mostly so I don’t see how this lot will provide any cashflow or any value besides selling it one day or building on it. Can you borrow against land? How are they appraised?

Tyler Gibson · Answer

@Sam Bromano I would not suggest buying the lot to be used as part of your BRRR starategy. You can't force appreciation on vacant land without building. Land typically is going to be valued much lower then a parcel with a structure on it. I own a vacant parcel in Daytona Beach right next to 2 duplex units. The land is worth about 10k retail. the duplexes are worth about 170k each. The cost to build on the land about 200k-250k. With rents what they are in the area it is not worth it for me to build on the land.

Buy vacant lot next door to single family?

1 Reply