Investing can be a lucrative endeavor— according to the Bay Property Management Group, the American property management industry reached an impressive $88.4 billion in 2020. There is certainly a lot of money involved in land investment. However, it’s also something that requires a good amount of research to get it right. If you are interested in this type of investment, there are several questions to ask your land investment company before putting your money down on a property. It’s important to understand that there are many risks involved in land investment, so, the more you know, the better. Here are some basic questions to get you started.
Does the Land Have Appropriate Zoning?
Working with a land investment company can help you decide what your goals are before investing. They will be able to assist in researching what kind of zoning is required for your plans. It might even be that the land in question cannot be rezoned, so it’s important that you find out before buying. For example, if you plan on investing in property to ultimately rent out to businesses, you wouldn’t want to purchase land that is permanently zoned as residential.
How Will the Community Feel About the Purchase?
You may not really care how the neighborhood feels about your investment, but they can make things difficult for you if they’re unhappy. A land investment company will know the area and what the land was used for previously to avoid conflict and problems. For example, if a community already has a saturated grocery market, you would not want to purchase available property to build another grocery store — your money would be better invested in another area.
What is the Land’s Environmental Condition?
Your land investment company will be able to let you know if there are laws that hold the owner liable for things like remediating hazardous waste. Additionally, looking into rainfall and weather data may help you make an informed decision about a property. For example, investing in a property that is prone to flooding during heavy rain would mean that you need to allocate more to your construction budget to ensure proper flooding mitigation. This may also affect your insurance rates, so you need to know what you’re getting yourself into.
What Kind of Taxes Can You Expect?
Taxes are a part of life, and, as an investor, you’ll have to pay your fair share. It’s important that you know what kind of taxes are associated with the land you plan to purchase. Certain categories of property may even qualify you for tax breaks, but, ultimately, your tax rate will be determined by a number of factors that vary greatly. The land investment company you work with will have the best information about what you can expect.
What Titles and Rights Come With the Land?
There are several rights and titles that come with being the owner of land or property. There may be mineral rights, road access rights, or even development rights. If you know what you have, you’ll know all the opportunities at your fingertips.
It’s essential to understand your needs before investing. If you’re ready to dive into property exploration, be sure to ask your land investment company about the prospective property’s details and background. Contact our team for assistance or advice — we would love to be part of your investment journey!