Flipping land is a popular way to make money in real estate. In this, the investor buys land at a lower price and quickly sells it to make a profit. The property is sold without making improvements. Here, we have discussed the best ways to make money with land flipping.
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Find Cheap Land
First, you need to find cheap land that will have a higher demand in the future. Since vacant land is abundant, the location is crucial. The value of the property depends on its site.
Barren land located in the desert might be cheap. But there will be fewer or no buyers for this land. Barren land on the outskirts of a developing city is a good option, as it comes with many potential uses.
As the city grows, you will find several potential buyers in the form of real estate companies and different industries. You can consider buying land zoned for something at a slightly higher price.
Buy Only Verified Land
In the land flipping, going cheap is not enough. It will help if you are careful before making an offer. Here are some essential things to check:
- Are you dealing with the rightful owner?
- Have you verified the owner in government land records?
- What documents the owner has to claim ownership of the land?
- Are the documents genuine? Get them checked with the land registry.
- Have you inspected and surveyed the land in the neighborhood?
- What are the environment, infrastructure, security, and soil structure?
- Have you conducted an independent valuation to know the actual worth of the land?
When it comes to offering a price, you need to consider the price of surrounding properties. The amount proposed by you should be lower than that. In simple words, you should offer a lower price than the value you have in mind for the land. It will also help if you show how serious you are to make the deal. Tell the seller you are ready to pay in cash and want the land immediately.
Hire Expeditors/Architect to Entitle Land for Highest Use
After the purchase, you need to work with an architect or expeditors to entitle land for the highest use. This will allow you to determine the maximum potential of the property.
The definition of highest and best use means probable, reasonable legal use of land which is physically possible, financially feasible, appropriately supported, and results in the highest value.
Make Land Improvements
If you want a higher price for land flipping, you can make a few land improvements. Spend as much as your budget allows. You can be creative while making land improvements.
- You can clear the area
- Create a path to make the land more accessible
- Fence off the area
If the land does not have essential utilities like electricity or water, address them before selling it. This will allow buyers to see the full potential of the property.
Sell the Land
After you have entitled the land for the highest and best use, you can start looking for a prospective buyer. You can research on the Internet, and work with an estate agent who knows the market in the location.
Estate agents have the best knowledge about the neighborhoods and the locations that have many takers. They also have insider knowledge about the real estate market. They can connect you to real estate development companies who can start a project on the land you acquired. Real estate agents also know the future government projects that can increase real estate prices.
Don’t be too greedy or attached to the land. You need to be happy even if you make a small but reasonable profit in the deal. The tips given above help make the property attractive to buyers and earn good money through land flipping.