In the diversity department for real estate Investors, land offers a great variety, and you’re likely to find a way to incorporate your life passions and investments. But, of course, once you’ve found your investment property, you must pay the right price to realize the best return on the investment. But first, you’ll need to determine the path you want to take with your investment.
Once you’ve decided on your plans for the land, there are ways to get a general idea of the price you should be paying. Unfortunately, unlike developed properties, with many other similar listings to compare to, the current market value of land is often difficult to pinpoint precisely; if there are relatively similar properties, this can go a long way towards guiding you to the correct number. Before you jump in, perform due diligence and consider the basics, like access and utilities, and that your intended use won’t be the cause of any zoning issues.
While we can’t cover all the possibilities that raw land offers in this article, read on as we explore an overview of five ways to profit from land in Chicago.
Due to the limited supply of land and the increase in demand as the population increases, land value can increase dramatically over time. For this reason, many investors buy and hold with a long-term outlook to profit from land in Chicago. One of the most passive real estate investments, it’s a straightforward matter to have someone manage land holdings in your portfolio on your behalf, other than paying taxes. There is very little to do when you own raw or vacant land, though some property you must mow regularly, depending upon the zoning.
Improve and Flip Raw Land
Land purchased for flipping has the potential to offer a great return on investment, ROI, when you buy in the right location at a great price to profit from land in Chicago. You could do the footwork to add entitlements, which adds value to the land. Subdividing a larger plot into smaller lots is another way to increase the value of your investment quickly. In addition, offering to finance the land can garner you an even higher price from a buyer who doesn’t have the funds to buy the property outright, with easy financing and a low-interest rate.
If your goals are to develop raw land into a commercial or residential property to profit from land in Chicago, refer to the land residual technique to determine the value. The bottom line is, once you’ve calculated the costs to complete the development, the numbers must add up in your favor. Because there isn’t fierce competition for land, you can come in with an offer lower than your determined value, raising your bid only if the seller counters; the better the deal, the better the profit.
Another way to remain passive yet profit from land in Chicago is to lease the land to another for use. For example, owning a lot on a well-traveled main highway may offer the opportunity to lease to seasonal retailers, such as temporary pumpkin patches, Christmas trees, or fireworks stands. In addition, farmers and ranchers often lease land and are responsible for development and taxes.
We Buy Houses Chicago
Working with We Buy Houses Chicago is the best way to profit from land in Chicago. You can count on the experts at We Buy Houses Chicago to help you find the property that aligns with your investment goals. And, We Buy Houses Chicago has a steady inventory of the best land available on the market in Chicago to help you get started now. Contact We Buy Houses Chicago at 312-584-2633 today!