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. By the “right way” I mean, with a high amount of cash down, if not completely paid off altogether. In times like these, being free of the bank is vital and offers the highest degree of freedom and stability. For many people, like young couples or people with low paying jobs, this may not even be an option. After achieving this monumental feat, realizing the freedom that comes from doing it, and avoiding the taxes that can prevent it can be a windfall.
Keeping your real estate that is free of debt as rental or income properties is a great way to compile a source of income that is always there when you need it. If you earn a six figure income and want to avoid paying the full amount of taxes on it, you can reduce your tax liability on your net sheet by buying real estate. Using your tax money to purchase real estate, instead of simply paying it directly to the IRS, is easier than you might think, and will effect your net sheet in such a way that you will actually pay less in taxes. You tax professional can explain all of the ins and outs of using your income in this manner.
If you do not have enough money to purchase a rental outright, maybe you can save enough money to simply buy a building lot and wait until you can save up more money to build on it, after all, there are more than the market needs right now. You can get some very good deals on the building lot market, especially when buying REO lots in bulk. The best investment plan for buying building lots would be a longer term plan that involves buying and holding, due to the fact that they will not yield much, if any, profit for some time in the short term.
Keep in mind that the bank is not your friend when buying real estate, so buying with cash is always the best option. Making alliances with local builders, to construct rentals on your building lots and share in the income, is a super way to be creative and establish partnership avenues which will benefit you for years to come.
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