When people think real estate, they think brick and mortar: homes, condominiums, dream estates, mansions, apartments and other physical structures. This conception, however, could not be any less true. If you want to invest in real estate and don’t want to deal with the hassle of maintaining a building, there is an option for you; that is, to invest in a lot—a property that is simply land.

So what are the benefits of investing in a lot? We first mentioned the hassle and expense of upkeep that come with purchasing a building. True, if you purchase a lot you are going to have to pay for someone to come here and there to rid the land of overgrowth and weeds; but this expense pales in comparison to the kind of money you are going to loose in maintenance and upkeep costs of a building. Land does not require that you paint it every five years. It doesn’t have pipes or windows that can break.

Investing in land and not a building also helps to cut down on insurance costs. This is not to say that you don’t have to insure your land; rather, that the cost of doing so is significantly less for a plot of land. It should be noted that in addition to these savings, investing in land is a much safer bet. There is no condominium to be toppled down by an earthquake, no house to be swept away by a hurricane. This consideration should be especially important to those looking to invest in areas prone to natural disasters.

And although land does not have nearly the amount of expenses as a property with a building, the drawback is that it is tough to generate revenue from it during your ownership. If you want renters, you’re going to have to put a roof over their head; that being said, if you just have a lot and no structure, you only stand to make money off your investment at the point of sale. However, if you own a large enough piece of land in an area where regulations on use are fairly lax, the possibility of renting out your lot for events like carnivals and concerts does present itself.

As with anything, there are pros and cons to investing in a lot. However, if you’re out to be safe—but make a little less money—buying land might be perfect for you.

This is filed under Real Estate Investors.


     Twitter It!