Advice On Holding Land
I have recently bought several single family lots in Florida 1/8 th of a mile from the gulf coast. While I should have really been researching these questions before the purchase, I couldn't pass up the deal. Turns out so far I seem to be right because the properties are nearly double in value in less than 2 months.
My plan is to hang on to them for 2-3 years b/c I feel there is excellent potential based on the market in my area of purchase (as well as their value relative to other land in Florida as a whole) that these lots will more than triple in value.
HOWEVER. I want to be the fat big not the slaughtered hog. As such is there any advice that anyone can offer whereby I can investigate and monitor my risk of continued ownership. This is my first lot purchase. I really don't know.......Maybe there are geological risks that I can check out such as flood plain maps, monitoring potential govermental decisions that would affect land value, etc. I don't know resources on what and how to check such things out.
Can some one please give some direction.
I would definitely check to see if you are in a flood plain area. The other concern I would have is future development. Nothing like owning a piece of land next to a freeway or an industrial park. All of this information should be available through your local county. If not, they should be able to point you in the right direction.
Some issues to check out that could impact future value (developability):
1. Uses and lot size permitted by current zoning as well as other requirements. Ordinance and map should be available at the municipality.
2. Are the lots already subdivided and separately deeded? If already subdivided, what are the requirements to get a building permit? If not subdivided, you may want to do that before the municipality makes changes in subdivision ordinance that could be onerous.
3. Utilities -- public or on site? The municipality should have maps for existing and planned public water & sewer lines. If public sewer, is capacity available or is the situation heading toward a moratorium on new sewer connections? If on-site, has any perc testing been done for on-site sewage disposal system suitability?
4. Floodplain. You can review the mapping either at the municipal office or county planning office. The info is also available as online downloads, but it's tough to work with this type of data without having true to-scale hard copy.
5. Environmental contamination. Do you know what prior use was for the land?
i have been successful holding onto land for a couple of years myself. I bought two in 2000 & 2001 and i sold in 2003 & 2004 both more than 5 times what I paid.
I bought some more in 2003 and they are now worth 6 times what I paid for them. I just keep sending out letters and every once and a while I get the chance to buy another one. I now have to sell one to buy more. i am thinking about doing a 1031, but I may want to spend the money on other things, not just buying more property with the entire amount.
I have thought about doing owner financing on the lots, so that I will get a monthly income and I get down payment money that I can put down on MORE property.
Love the gulf coast and can't help but wondering if I can live there one day. I also just bought a house near all my lots that I rent for $1000 a week mostly to europeans vacationing on the coast. So that too is another option for you, building a house, furnishing it and renting by the week.
Good Luck!
As always. Thanks to all for your insigtful reponses. I will use wisely. Happy investing.
Where in Florida are the lots? There are few areas where lots aren't doubling and tripling in value over a short period of time in Florida these days. It's either a huge bubble that will burst once markets up north cool or it's a bonafide boom that will last for many years to come. I think it will be clear which it is once rates are back above 7% next year.