Looking at these different investments, as well as other forms of land investments, may allow you to go in a new direction with your portfolio.
Land Investment Deals Can Be Large or Small
Investing in raw Colorado Springs Land can be a pursuit on its own, or it can serve as an important aspect of your real estate portfolio. The effects of zoning changes can make all the difference between investing in land that is useful for development and ones that are best used for growing crops. In either case, if you are going into investment for the long term, it is a good idea to learn what plans are being made by the local government regarding rezoning and infrastructure plans. These types of plans will affect how the land changes hands in the future seasons, and they’ll make you more interested in finding other ways to generate passive income.
These raw land deals are the types that can produce excellent returns on your investment.
Raw Land Investment Opportunities Five Ways to Capitalize on Raw Land in Colorado Springs
A Buyer’s Market in Colorado Springs: With the recent economic downturn, foreclosure rates have risen and homeowners are having difficulty getting their mortgages renewed with current lending conditions. As a result, those who once owned homes have been forced to rent, causing rentals to be at an all-time high. This is a prime opportunity for investors as renters look for rental properties that are priced substantially lower than similar homes in the same area of town thus providing bargain opportunities. Additionally, this will cause rental rates to drop over time, which provides property owners another advantage of being able to become a landlord with a significant profit margin.
If you are working directly with a seller, here are some tips to keep in mind.
Tip 1: Keep track of land you see for sale and contact the owner about it.
Rather than seeing an ad, then immediately emailing or calling, do some leg work ahead of time. Look up the property on the county assessor’s website to get information such as its assessed value, previous sales prices if available, and most importantly – when it last sold! The date of sale can be crucial because now would be the ideal time to ask the owner what they are looking for…after all this is a negotiation!
This can increase the overall value of the land by allowing more homes on the property.
The first step in subdividing land is to buy a parcel of land large enough to be subdivided. It must also be large enough for all projects such as roads and parks, as well as multiple building lots which are considered “vacant.” The developer then hires an engineering firm to survey the proposed site with a transit or total station. A high-speed transit instrument allows surveying professionals to get jobs done quickly and accurately while taking slope angles into account. This raw information can then be used by engineers or landscape architects to design the layout of roads, houses/building lots, driveways, etc.
When you are spending your time, effort, and money to develop raw land, there are many things you can do to ensure it turns out successfully.
The first thing you will need is a decent piece of land. You will not have to spend an immense amount of money on this initial purchase; however, it must be reasonably priced. Remember that in the future you will want your raw land to turn out well so it is essential that you don’t blow all of your cash on an extravagant purchase. Narrow down your list to a few before grabbing the phone or sending off emails.
Secondly, once you have found the perfect piece of property for sale, make sure it does not belong to anyone else. Sometimes if people see potential in a piece of property they might try to rent it out or hold it themselves instead of selling it for a quick profit.
This will help you gain a profit without having to worry about the day-to-day maintenance of the location.
When you buy land long-term, it is best to purchase from an individual owner. Town management will request taxes and upkeep fees that can quickly send your investment into a negative balance if you do not have the revenue to cover these costs on top of your original investment. In addition, when buying as an individual, there’s always the possibility that some so-called “friends” may want to get in on the cheap too (feel free to chuckle here). Ask friends for referrals from individuals looking to sell their property or do a joint venture with them if they are experienced investors themselves.
Work with a Pro
We are in the Colorado Springs area and looking to get deals done. Let us know if you have anything available!
“Ok, what should I do in this situation?” That’s usually the first question most of our clients ask when they find themselves at the crossroads between being overwhelmed and not doing anything at all. The good news is that we can help with any step of the process. We’re always there to listen, give direction, or advice. After 5 years in business, even some of our seasoned investors come to us for assistance- so doesn’t hurt to ask!
Another common question; “Why would an investor agency charge a fee?” Now, this stumps a lot of people who pay when your friends are involved in the deal.