With markets increasing in volatility buying tangible assets such as land is becoming a more attractive option to many. Land as an investment has two major advantages; the utility that can be gained from using the land yourself, either as a residence or business, or the income that can be gained from renting it to tenants.
Most land is bought for one principal purpose, as a place to live. When buying land to live on factors beyond simple finances come into play. The culture of an area, the local economy, proximity to amenities and personal taste all influence where to reside. Buyers are often looking to move into areas with great weather, vibrant streets and proximity to urban centres. Mar Vista is good example of such a hotspot that has options for both people entering the market as well as more seasoned buyers.
When looking to buy for renting purposes there are multiple factors to consider. The buyer should first decide on whether they are looking to rent on a long-term basis, or take advantage of the higher return that short term rentals provide.
- Short Term Rental – Taking the short-term rental route can be lucrative, with the ability to charge a much higher rent than traditional rental properties, but can have some pitfalls. It is important to be aware that many areas have rules that restrict short term rentals in specific communities. Doing homework about the local laws is highly recommended before making a purchase to prevent a nasty surprise later on.
- Long Term Rentals – Finding long term tenants for your land can provide a stable income but it is important to understand that becoming a landlord comes with significant responsibilities. The owner is typically responsible for all building repairs and maintenance of the grounds and can face legal repercussions if they fail to keep the property in good condition. For those that wish to be less hands on with their land a property management firm can alleviate most of the work, in return for taking a percentage of the rent.
Whether you are buying land to create a home in, or as a rental property to create an income from, you need to spend time researching the areas, laws and regulations. For an educated consumer owning property can be a lucrative and rewarding investment.
Author bio- Ray Lyon became a realtor with an aspiration of being a sales leader in the market. With him, he took all of his experience in sales, negotiating, marketing, design and educational background to excel in his new career. He quickly advanced and is in the top 1% of Realtors Nationwide winning various awards along the way. He was named LA Business Journal’s “Real Estate All Stars”, Featured in LA Magazine as a “Top Agent” & named in Real Trends “Americas Best Award” for being the top ½ of the top 1% nationwide. He owns several properties throughout CA. He has flipped and built several homes with his builders and contractors. Not only is he successful at what he does but he is very passionate.