What Makes Land a Good Investment?

Factors to Consider when Purchasing Land

By Josh Brimhall

I was raised in a family that taught me to appreciate not only the beauty of the world we live in, but also the value of a raw piece of Land.  Most people see a parcel and don’t think much of it because, after all, there is land all around us. Why would it be special?

Some people aren’t aware of the superior benefits that come with purchasing land.  The simplicity and stability that comes with owning the right piece of land can far outweigh the myriad of problems that can to come up with other types of real estate. Land is a stable, safe place to invest and should be thought of as a secure long term asset that can surmount market trends.

Not all land is equal however.  There are a variety of factors that can positively or negatively affect the value of a piece of property. When considering a land purchase and whether it is the right investment for you, it is best to consider the following:

Zoning:

There are multiple Zoning Districts, the most common being Commercial, Residential, Industrial and Resource. The Zoning Ordinances dictate what uses are allowed in each district, or more notably, what is prohibited in a zone.  It is extremely important to understand what a property can be used for, and what the best use of the property is. With this knowledge you can quickly determine whether it will fit your needs.

Utilities:

Whether you intend to develop the property yourself, or market the property to a developer, it is important to understand what limitations you may have.  If a property does not have access to basic utilities you will lose a massive portion of the property’s usability, marketability, and value.

Growth patterns:

Analyzing the development growth patterns and land availability of an area could play a huge role in the success of your asset. There is likely to be more demand for land as an area expands, which can add value to your investment.

Easements:

Simply put, an easement is the right that someone has to someone else’s real property.  As you can imagine, this information is vital for the access, planning, and development of your property, but is not always apparent to the naked eye.

These factors, along with many others, have the potential to make or break an investment if not discovered and/or taken into serious consideration. Although this may all seem a bit overwhelming land can be an excellent investment and working with an experienced broker is critical to your success.

Joshua Brimhall