Make Money with Land

[rocksnstumps]

Note that I started to see this 7, 8, maybe 10 years ago. This was before land prices began to rapidly escalate.

I think another reason was the roaring stock market back than and cheap interest rates. Similar to the high stock values pushed land values in the roaring 90s.

Moved away from my home state for work in 1991. Moved back in 1998 and vacant land prices had over doubled. Did my pay check double in that time ..... Ahh no

 

[Oleo]

Sorry, I fell behind on this thread. Thanks for all the replies!

What you describe is my dream job… in fact, I have thought a lot about “retiring” from my job

This is where I'm at - I sold a business and have flexibility to do something different. I just haven't found anything exciting that keeps me busy. I'd be able to dedicate all my time to this, and my financial expectations would be fairly low - as long as I'm making more than just parking money in the stock market.

The only little trick I’ve found, and I won’t go so far as to say I’ve even capitalized on it yet, is the incompetent realtor part.

I've found a couple deals this way - one I'm keeping and one I'll sell in a few months. Hopefully I'm the one that's right about the value rather than the "incompetent realtor".

What kind of blows my mind with realtors is that they are showing a $950,000 listing and have twenty half-assed photos with almost no description of the property or the neighborhood.

Exactly how I found one of mine. One picture of the gate from the road. . . . I'm hoping big bucks sell, because I have some nice trail camera pictures after owning it for a year.

I just bought a farm from a guy who bought a year and half ago with an adjustable mortgage that he couldn’t swing with the raise in rates.

Was it just a coincidence that you got a good deal, or did you find a way to get that information and approach the seller?

Check out the The Land Podcast. I think it is the best resource out there right now if you are interested in buying/selling land.

I'll check this out - thanks!

My uncle is building a log cabin on my place that will have utilities with a skinning shed.

I could see that adding a lot of value to vacant land that someone is wanting to flip. It wouldn't necessarily have to be a cabin, but some type of house with a utility barn would make it more appealing to a lot of buyers IMO.

Any other thoughts on this - I've considered doing something like this. Maybe a bardominium or something, but I can't decide how far to go. It's a slippery slope when I start thinking of a pole barn with a dirt floor for $30k then just gradually nickel and diming myself to $150k. I hate to build the wrong thing and alienate some of the buyers that might buy vacant land. Think there's a better market for something with a small building than vacant land?

 

[Brian662]

I think the market for barndominiums is limited. I personally wouldn't do it as a way to build value on a property.

 

[Howboutthemdawgs]

I think the market for barndominiums is limited. I personally wouldn't do it as a way to build value on a property.

Interesting…explain why you think that? I know one thing they are damn expensive now

 

[Brian662]

Interesting…explain why you think that? I know one thing they are damn expensive now

While they've become more popular due to their reduced cost to build, there is a high, majority percentage of homeowners who won't even consider them.
Not saying one couldn't be sold, just limiting potential buyers. Maybe that doesn't matter in the current market, but the majority of the time it matters, especially if you're flipping like the OP.

Unless you general contract, build, wire, plumb, and finish the building yourself and have years of experience doing such, I don't think building with the intent of flipping is the right move.

 

[Howboutthemdawgs]

While they've become more popular due to their reduced cost to build, there is a high, majority percentage of homeowners who won't even consider them.
Not saying one couldn't be sold, just limiting potential buyers. Maybe that doesn't matter in the current market, but the majority of the time it matters, especially if you're flipping like the OP.

Unless you general contract, build, wire, plumb, and finish the building yourself and have years of experience doing such, I don't think building with the intent of flipping is the right move.

Gotcha. I was thinking in terms of a second home on a property and not necessarily a primary residence type on a flip property. Personally I love them. Unfortunately the cost of metal is through the roof and they are no longer cheaper than standard housing, but they are less of a maintenance issue. I wish my primary residence was one!

 

[Brian662]

Gotcha. I was thinking in terms of a second home on a property and not necessarily a primary residence type on a flip property. Personally I love them. Unfortunately the cost of metal is through the roof and they are no longer cheaper than standard housing, but they are less of a maintenance issue. I wish my primary residence was one!

I mean if we are talking about a second house type of place then the list of buyers is limited even more. Don't you think?

 

[b116757]

8-9 million boarder crossings just since creepy Joe stole office these people will need housing we have been in a housing shortage for a while now. I don’t see a huge market correction on the horizon because of the housing shortage especially if the fed does indeed start cutting rates like they announced they may in 2024. There will be bumps in the road for prices but I just don’t think we will see the market correction like we did in 2008 when the government forced banks to make loans to people that had no business buying homes in the first place this had gone on for years before the inevitable crash occurred. This time around it could be the commercial real estate market that sees the correction. With so many folks locked into very low rate mortgages I also suspect the number of homes hitting the market will be subdued contributing to the housing shortage. Many people would be fools to give up their ultra low rate mortgages.

 

[H20fwler]

I mean if we are talking about a second house type of place then the list of buyers is limited even more. Don't you think?

I myself don’t think so at all on a hunting or recreational property.
And if it was a property that someone wanted to build a traditional house on it would make a nice guest house. I don’t see the downside on that one but I am biased also.

 

[Howboutthemdawgs]

I mean if we are talking about a second house type of place then the list of buyers is limited even more. Don't you think?

I would actually say it opens more doors to potential buyers. Not having a place to stay is a huge issue for most hunting properties in my neck of the woods where people travel to Hunt .

 

[Brian662]

I myself don’t think so at all on a hunting or recreational property.
And if it was a property that someone wanted to build a traditional house on it would make a nice guest house. I don’t see the downside on that one but I am biased also.

I would actually say it opens more doors to potential buyers. Not having a place to stay is a huge issue for most hunting properties in my neck of the woods where people travel to Hunt .

Those are both all fine and well except the cost of the land just increased 200k and it phased out another portion of potential buyers. That's all I'm saying.

The difference in buyers between a $500k rec property and a $700k rec property is pretty substantial I would guess.

 

[Howboutthemdawgs]

Those are both all fine and we'll except the cost of the land just increased 200k and it phased out another portion of potential buyers. That's all I'm saying.

The difference in buyers between a $500k rec property and a $700k rec property is pretty substantial I would guess.

Yeah it may mean the difference in a partner or not. Just speaking from what I know, we get a lot Georgia, Florida, Alabama folks. They probably won’t consider a place up here or Illinois or Ohio without somewhere to stay.

 

[Turkish]

Those are both all fine and we'll except the cost of the land just increased 200k and it phased out another portion of potential buyers. That's all I'm saying.

The difference in buyers between a $500k rec property and a $700k rec property is pretty substantial I would guess.

IMO, from watching lots and lots of recreational listings, the seller doesn’t recoup his construction expenses on anything but the most primitive of facilities, unless he did the construction himself. Once you start customizing anything, the buyer pool would rather buy land and build their own. Simple storage building with plumbing and plenty of lean-tos, seem to be the happy medium to me. Now buying a tract with a decent house on it already that the original constructor took the hit on? Yes please! Bonafide cabins sure are nice, but they are a luxury!

ETA: I’m also learning the markets are very different in other parts of the country, so ymmv.

 

[BenAllgood]

Yeah it may mean the difference in a partner or not. Just speaking from what I know, we get a lot Georgia, Florida, Alabama folks. They probably won’t consider a place up here or Illinois or Ohio without somewhere to stay.

I don't know. I live in Louisiana, and my farm is in Kentucky. I stay at an Airbnb or hotel. I've gone back and forth about building on it to stay. It would take a lot of stays to make up for a building as well as upkeep and maintenance on it.

 

[H20fwler]

Those are both all fine and well except the cost of the land just increased 200k and it phased out another portion of potential buyers. That's all I'm saying.

The difference in buyers between a $500k rec property and a $700k rec property is pretty substantial I would guess.

In my area 90% of potential buyers would be local or within an hour or two drive.
I have done exactly as described and am positive I could double my investment here with property being under contract in less than a week.
Again that is my specific area and land prices don’t even make sense here anymore.

My concern is that in a couple years after we build a house that the properties value will be so high that it could create problems for my children being able to keep it in the future after we are gone.
We have three grown children and it always seems like there is potential that someone wants to cash out and take the money and run as far as inheritance. My oldest son has even expressed concern that if/when my wife and I build the new house it will become a white elephant, that the way it is now is totally manageable with just a barn house on it. I thought that kind of selfish on his part trying to cock block our forever house but do understand.
I would like to see it stay in the family knowing how hard it is now to ever buy hunting property.
I’m going to have to look into some type of land trust and leave a chunk of money to cover taxes and expenses?
We have three grandsons under the age of two now and I’m positive they will hunt. We also have a larger farm five miles down the road but it has no structure on it and will always be simple to manage.

 

[Turkish]

My oldest son has even expressed concern that if/when my wife and I build the new house it will become a white elephant, that the way it is now is totally manageable with just a barn house on it.

Bingo!

 

[H20fwler]

Bingo!

That is true, and I’m happy with it.
But….
My wife wants her house, and after 37 years of putting up with me she is going to get whatever she wants.

 

[Turkish]

That is true, and I’m happy with it.
But….
My wife wants her house, and after 37 years of putting up with me she is going to get whatever she wants.

Congrats! That’d be a dream come true for me!

 

[SwampCat]

I passed a great property - because is already had a nice living structure on it. I lived 20 miles away and didnt need another house. I didnt want to sell off the house and five acres and have the new owner and five grandkids hunt my property line. If someone does not want a house, a piece of property with no house suits them. If someone wants a house, a piece of property with no house suits them too - they can still build what they want

 

[Triple C]

I passed a great property - because is already had a nice living structure on it. I lived 20 miles away and didnt need another house. I didnt want to sell off the house and five acres and have the new owner and five grandkids hunt my property line. If someone does not want a house, a piece of property with no house suits them. If someone wants a house, a piece of property with no house suits them too - they can still build what they want

Always my advice when folks ask me about buying recreational land...don't buy raw land and then overspend on housing/structures. Lot of folks want recreational properties. Not necessarily a place to move the family. I ended up with a nice pole barn cabin, guest cabin and a couple of structures that we mostly did ourselves. Way back in 2011 and 2012. $100k or less all in with all my structures but that was back when they were giving away pole barns after the great recession. Would hate to start over today.