is owning land the same as owning a house ?

Question

So like the title says, is owning land the same as owning single family rentals?

Is the answer is no......is there a such thing as owning land and renting it out monthly like you would with single family rentals ?

Clifford Paul · Answer

Yes you can lease land for many different purposes.  I have land leased to hunters,  cattle ranches,  farmers and a couple to commercial businesses.  It's easy money because there is no capex or maintenance required.

Clifford Paul · Answer

I personally would not compare it to renting SFR, multifamily or commercial property.  Although I do rent some lots to businesses they are just empty lots that they use for parking of equipment.

Leasing of land does not have as high of rent payments but the cost to buy land is so much cheaper.  At least in Texas. But there's more than one way to make money with land.  So check out the example below what I have done with this property.

Example: I bought 238 acre ranch that had been in the same family for 80 years.

Purchase  price $450k

Property includes:

1 - 1050 sq ft 2 bed 2 bath hunters cabin

5 - 10' x 14' ground blinds with electric, heating, bed, mini refrigerator,  and TVs

Has 2 fresh water tanks ( a tank is a pond for my yankee friends) LOL both tanks are stocked with bass and catfish

Sold all the cedar trees for $4 an acre 238x$4 = $952

Sold 80 acres of mesquite trees for $2 an acre 80x$2 = $160

Rent 4 hunting blinds @ $2500 per deer season.  4x$2500 = $10,000

made a trade to my brother to finish clearing the 80 acres for use of 1 hunting blind. Also use it for friends and family members.

Rent 80 acres to another rancher for hay @ $20 an acre, plus we get 20 round bales per cut. 80x$20 = $1600 two cuts a year = 40 bales @ $35 per bale. 40x$35 = $1400. That's $1400 we don't have to spend a year on hay. Plus when hay is not in production my son turns his rodeo bulls out for grazing.

Rent hunting cabin @ $125 per night. Last year we had 52 nights rented. 52x$125 = $6500

First year income:

$952 - cedar trees

$160 - mesquite trees

$10,000 - 4 hunting leases

$2,500 - labor trade hunting lease

$1,600 - 80 acres leased hay

$1,400 - 40 hay bales @ market rate

$6,500 - 52 rental nights @$125

Total: $23,112

$450,000 - purchase price

$112,500 - 25% down payment

$2385 mortgage @ 7% for  25 years

$300 - property taxes a year

$1200 - Insurance a year

As you can see I'm not making a profit or breaking even.  But that was just year one and we have more ways to make money on this property that  we have not tapped yet.

Michael Ablan · Answer

@Arty Fresh - No, not really.  You could lease the land out to farmers, hunters, loggers, solar companies, but they'll only continue to pay if they have a use for it. Everyone has a use for a house.  Your end buyer (or renter) is endless

Wayne Brooks · Answer

You’d have to know how much, if any, you could rent it for to make that decision.....the rental returns, if any, are typically much much lower than a sfr of the same value.

Arty Fresh · Answer

@Clifford Paul

So you can basically own land and just lease it out to a variety of different people who can keep paying you monthly $$ for life?

So this is the same thing as having single family rentals ?

is owning land the same as owning a house ?

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