Investing in Vacant Land Instead of Homes

There are lots of choices when you are considering making a real estate investment – will you buy a family home, a condominium, a vacation rental property – or even a vacant block of land. Buying land is probably the least common alternative so it’s good to consider the pros and cons of this kind of real estate investment.

Some advantages of buying vacant blocks include:

  • If you don’t have a lot of money to make an investment with, vacant land may be one of the cheapest ways of getting into the market.
  • You might be able to decide later whether or not you want to build a home there – or just sell it off at a profit – but if you decide to build, then you’ve already paid of part of the block value.
  • Paying less for your investment than you would for another kind of property means you are at a lower risk from falling prices, and at a lower risk of foreclosure or a forced sale.

On the other hand, disadvantages of buying vacant land might be:

  • There is no income on your vacant land – nobody will pay rent to use an empty block.
  • Some land releases will have particular rules about keeping the block tidy, leading to maintenance costs for you, or there may be rules about a time frame within which something must be built on the block, which may not fit your schedule.