Is Now The Time To Procure Lots?

Buying land used to be the most likely and preferred purchase that real estate investors made, but in recent years many have started to doubt the safety of land purchases. There are a few guidelines for investing in land and they are easy to remember and apply.

Getting a loan may make things easier on your wallet but involving the bank only costs you more money in the long run. In other words, using your cash will help keep your bottom line stable and secure, without putting your assets on the line. In times like these, being free of the bank is vital and offers the highest degree of freedom and stability. I realize this is not an option for most people, so maybe consider it as an ideal more than anything else. Putting all of your savings toward real estate is a great way to offset any taxable income on your net sheet at the end of the year as well.

Building a portfolio of properties that you own, especially without any bank notes, can add much needed income at pivotal points in your life, like retirement. To use your income to buy real estate is a great way to put off tax liability you may be facing and to build a collection of performing assets that may fund your early retirement. If you use the tax laws in the most advantageous manner possible, you can simply take your pre-tax income and spend it on real estate, which will offset your tax liability on your net sheet. I do recommend sitting down with your accountant to outline the exact plan to do this as your first step.

Buying building lots for investments can be more risky because their is an over abundance of inventory in most U.S. markets, due to overzealous lenders and developers during the boom earlier in the decade. After this inventory gets absorbed, building lots will again be a very good investment. With the long term in your plans, buying building lots and holding them is a great idea, and only if you can do it without involving the bank, otherwise stay away from them for a few more years.

Using a note from the original land owner works better than using a mortgage due to the fact that you are dealing with a person, not a corporation. There are other options for getting rentals from the land you own, like doing joint ventures with a local builder, so keep your eyes open and make sure to cover your own assets in all of your business dealings.

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