I am from India and back there buying land as a investment vehicle is pretty common and profitable venture . The same works in USA as well if you put in some time to research and buy right piece of land . Let me walk you through various aspects of buying Land in USA
Basic concept behind investing in Land is that it is a scare commodity and cannot be produced . As population grows demand for land will also increase . Common types of land investments include
How to buy land in US
Back in India we have lot of opportunities to buy land as small plots and hence easy for a single investor to buy a lot of his/her choice but In US land is majorly available in acres and it would not be possible for a single investor to buy . So most of the lands are bought as group by forming a LLC . A Limited liability company (LLC) is a business structure that offers limited liability protection and pass-through taxation. As with corporations, the LLC legally exists as a separate entity from its owners. Therefore, owners cannot typically be held personally responsible for the business debts and liabilities .Advantage of this approach is that the property will not show up in your credit check and you can be part of the group to buy the land and can share the risk or reward of the purchase .
How to search for right piece of Land
As with every investment finding the right piece of land to buy play a major role on how it would grow over next few years . Here are few points that I check when looking for land
Here are few sites that you can use to search for lands for sale
Process of Buying Land
Once you finalize on the land and hire a realtor to work on negotiating you need to form a LLC with group of people buying the land . Once a LLC is formed with right percentage of ownership documented you need to pool in required money for downpayment . Before closing the deal a land survey is done to check if everything is as specified by seller . This process can take anywhere from 60 to 120 days . My choice of financing land is to take loan since you get more leverage and since we sell the land in couple of years you get to profit more .
Let's say your share is 100k and 30K down payment is reuqired . When you sell the land for twice its price then your share will be 200k. Now 200K - 70k loans which is 130k .is your profit for 30K investment . These are the 2 things that will surely help you find a deal
I will keep improving this article with more knowledge I get with my investments . Let me know if you have better ways of investing .
I am a real estate investor in US and India . Exploring more options to diversify my portfolio