There are many factors to consider before investing in land and you will also have to take into account how the bank will assess your loan application.

Compared to other investments, land doesn’t require much of your involvement and can be a long term passive investment.

It may suit investors with a limited budget, who can buy now and build or develop later.

Investing in land is usually high risk for small investors because of the low chances of cash flow and a fair rate of return.

You can invest in land and hold onto it until it goes up in value or hand it over to a developer or even develop it yourself.

You can also rent out vacant land to a business or household, turn it into a parking lot or rent it to nearby businesses.

Here are a few things to take into consideration:

• If land is on a Bank’s list of postcode restrictions, you may not qualify for a loan.
• Large blocks, slightly tilted or with a ravine, are harder to develop and therefore sell.
• Banks require the land to have direct access using an all weather road and the land must have water and sewerage services or septic tanks
• Raw land is not a good choice if you want to sell for a quick profit because of all the additional development costs.
• If land is cheap, it may have been landfill in the past or have other environmental contaminations.

Are you sick of handing over income from your investments directly to a Property Manager?

Use RealRenta instead and get your rental income paid directly into your Bank Account. See how easy it is!

Try RealRenta now for Free for up to 2 months and you will NEVER pay a Property Manager again: