Revenue on urban empty lots

3 Replies

Hey all BiggerPockets community,

I’m located in Seattle, WA which might matter to this post. I’m looking at land-banking for urban lots that are difficult to develop but will inevitably make sense given our aggressive housing market. My creative side is asking, how do I generate revenue on these empty lots while I’m waiting for the long term hold to become worthwhile? I know it’s hard to say what to do without specific examples, so lets assume there are two lots: one which is level and zoned multifamily in an environmentally critical area; and another single family lot with a fantastic view on a cliff. These are extremely affordable in comparison to other vacant lots in the area, and I could make monthly payments on either with a traditional loan and still expect a return in 5-10 years time or go out for syndication on new development.

But we’re here to churn up innovative strategies. So here’s what I’m considering; private park rentals.

Sniffspot and other apps now offer hourly use of private dog parks and they've become even more popular during the current crisis. I suspect that people with unsocialized dogs and those in fear of contacting covid-19 will continue to rent these sort of premises. I'm sure those in the Midwest cannot imagine what I'm proposing unless you live in chicago. But believe me. This is like AirBnB for dogs.

Another revenue stream is the heated wedding market in the northwest and I would imagine that I could rent the property for events during the summer. This is totally legal in Seattle. At the current Seattle parks fees rate for similar event rentals I would be not only be able to compete, but would net cash greater than the mortgage payments for the year in just three summer months.

Are there alternate strategies you have found to generate revenue on vacant lots? What do you think of my off the wall ideas to create cash flow on the land bank? Going out on a limb here. Please venture out with me in your responses!

Thank you in advance

Interesting, the private dog park sounds dumb to me that anyone would pay money for that, but if they do I guess it isn't a bad idea, but you'd have to keep an eye on cleaning up after the dogs.  Wedding venues can certainly be useful.  

Some others that I don't know the legality of in any given area but that you might look into would be parking spaces or urban farming/ gardening, in non-covid times you might be able to lease the land in exchange for a share of the profits from whatever crops are grown and sold at a farmers market.

If the lot is vacant and undeveloped where do the bathrooms for the wedding venue come from? I"m not sure a vacant, steeply sloped lot with no bathrooms will have many takers as an event space.

We have land banks on ECA land in Seattle so I think that strategy is sound, but both Sniffspot and events sound like more trouble than their worth (once you factor in the cost of your time to manage it).

Some ECAs are more expensive than others.  There is a reason why those lots have not been developed in the past 100-150 years.  Sites with wetlands are pretty much useless.  Steep slopes are expensive.  

Plus the city still isn't gonna let you cut down that exceptional tree...

There are still many affordable properties to buy locally. The MHA rezone and the new ADU legislations, as examples, have opened up many more opportunities.

Best of luck.