Flipping vacant land is a type of real estate investment that’s often overlooked. Flipping houses can have its own benefits and drawbacks. It can also be more expensive and a little harder to secure the property if you live out of state. However, flipping land might be a better option for your situation depending on factors like the locale, budget and sweat equity you’re willing to put into the project.
Here are some of the main pros and cons of flipping land:
Low Competition - From a business perspective, flipping land comes with wide territory and low competition. Since you aren’t restricted to a single geographical area, you’re able to reach potential sellers and buyers across the country. Plus, with the vast amount of sectioned land still available, there is plenty of room for competition.
Ongoing Income Possibility - Through seller financing or working with lenders, you can turn your land flip into an ongoing income stream. Buying land with cash and selling with terms can mean regular monthly rent or mortgage payments in your pocket after the initial sale.
Active Investment - Flipping land one time seems simple, but making a business out of it requires a lot of work. To maintain steady activity and profits, you need to keep up with marketing efforts and prospecting. Buying and flipping land for profit is an active investment, which means you’ll need to stay on top of your business efforts regardless of cash flow.
Selling Can Be Tough - While finding land to buy might be easy, selling it can be more difficult. Most land flippers find that their primary source of frustration and bottlenecking occurs in the sale process rather than in the buying and improvement process. You may need to hold on to your improved land properties for a while before finding the right buyer.
Flipping land might be a relatively uncommon form of real estate investment, but it definitely has its advantages. Keep these pros and cons in mind when considering whether it’s the right way for you to get into the flipping business.
Kate Hogan – Amherst MA Realtor ® and Pioneer Valley
Your number one source for Real Estate in Amherst, MA, and surrounding towns!
Kate Hogan, a 20-year resident of Amherst and Top Producer at Brick & Mortar realty, has that unique combination of qualities you need in an agent: a big picture view of the entire Five College area, towns, and neighborhoods, a high standard of professionalism, and an innate talent for understanding homes. All of that, plus this savvy agent is known for being experienced, knowledgeable, and a lot of fun to work with. As a full-time real estate professional, Kate’s approach is focused on getting to know her clients as real people and taking care of them from beginning to end.
