Make money from vacant land. Sounds nice. But how?
Are you one of the many investors across the country that have bought a piece of land? Did you do it with the intention to build and create something great with plans of a quick sale? Only to learn that it was harder than you thought and even harder to get rid of it that investment land?
Don’t fret, it’s not over yet! Unused land can still bring you to increased earnings and wealth. Plus, it’s not too difficult to do with. There are many options and avenues available to allow vacant land to pay you.
Vacant land is worth the investment
Vacant land is typically viewed as an untested, abstract investment. Often it is thought of as a non producing form with no income. It comes with its own set of expenses and is known to be only profitable if the market value increases later down the road. Nevertheless, vacant land is not only an outstanding grid against inflation, but it also generates multiple tax advantages.
That’s right, don’t forget to write off your expenses! Almost every expense, including your property taxes and mortgage interest is a tax associated write off. These expenses can be written off on your Schedule E. Use as much as you can to offset income you receive from renting out your vacant land or income from any other real estate that you own.
Also keep in mind that since there is no money exchanges just yet, until you truly sell your land there are no taxes taken from any annual increase in its value. This keeps all of your capital working and continuously growing for you until your ready to use it.
How do I buy undeveloped land?
The short answer? Strategically. If you haven’t bought the land yet. Do some detective work.
You want to know about zoning, access to utilities, land use restrictions, average weather,basically everything. Check out this article on the mistakes to avoid when buying vacant land.
Make sure you compare prices and properties. The same amount of acreage zoning might exist in 2 side by side plots with completely different prices. The exact same plot might be offered through a website for a cheaper or more expensive price than the owner is offering in a craigslist or facebook post. Do your due diligence.
And don’t forget to check out the different sites that sell vacant land as is. Feel free to browse the sites listed below. Sometimes the prices and deals are unbeatable!
8 Ways to Make Money From Vacant Land
Lease the Land to Farmers or Marijuana Growers
Since the legalization of Marijuana there has been a sudden influx in the growth of cannabis. And the lands needed to grow it. Marijuana continues to become more and more prominent as a substance for healing, pleasure, essential oils, medical improvements and psychological relief.
Consequently, growers are in need of landowners willing to let them grow the plant. Check out this article on Leasing to Marijuana Growers.
“Cannabis is going to be a $20 billion industry in 2020. Someone is going to have to build millions of square feet of infrastructure, which is going to take billions of dollars to produce the product that will generate that forecasted revenue,” said Tim Keogh, CEO of Denver-based AmeriCann. You can read that article here. “As of now, the infrastructure isn’t there to meet those numbers.”
If this is something you are considering, the first step depending on your state is to submit an application to the local Department of Land Use. In some states this application is referred to as the Marijuana Production Application.
Getting approved
Since the legalization of Marijuana there has been a sudden influx in the growth of cannabis and lands needed to grow. As marijuana continues to become more and more prominent as a substance for healing, pleasure, essential oils, medical improvements and psychological relief; growers are in need of landowners willing to let them grow the plant. Check out this article on Leasing to Marijuana Growers.
“Cannabis is going to be a $20 billion industry in 2020. Someone is going to have to build millions of square feet of infrastructure, which is going to take billions of dollars to produce the product that will generate that forecasted revenue,” said Tim Keogh, CEO of Denver-based AmeriCann, you can read that article here. “As of now, the infrastructure isn’t there to meet those numbers.”
If this is something you are considering, the first step depending on your state is to submit an application to the local Department of Land Use. In some states this application is referred to as the Marijuana Production Application.
Lease to Cell Companies for Cell Towers
We all have cell phones and want better service. We hear of the 5G service coming to give faster speed, better quality and many more promises from cell phone companies all over. Tower companies and a landowner can collaborate together. This allows the cell tower company rights to install and maintain a cell tower for a given number of months to years. The monetary value of an agreement as such is often arranged prior to the installation of the tower.
As we find with many other methods to generate income from vacant properties, there are particular requirements for zoning and permitting. These need to be considered before agreeing to an amount or leasing terms. Generally, you will want to ensure that your land carries ground elevation. The lower the level of elevation the more money that a cell tower company would need to put into building a larger tower to compensate for such. Although there is no set lease rate , The average annual cell phone tower can pay as much as $45,000.
Boat storage
If you are looking to increase revenue to help build your wealth, start a business with great income potential and very minimal maintenance required. You may want to tap into this phenomenal opportunity.
A storage lot or boating dock opens the door and enables you to offer storage space to owners of campers, boats and other recreational vehicles. An easy way to make income off your land is to open it up for others to use as a storage lot.
Boats are a very favored storage option as it allows boat owners to leave their treasured boat on your property during a full season (typically the winter) and as warmer weather comes, owners will remove their boats from storage and take it out to sea.
Average rate for a monthly boat can vary according to conditions. You can expect to receive between $200 to $300 per month to store a boat.
Foresting the timber
Who would have thought! The timber on a piece of land is truly valuable to someone. Consider, planting trees, hold on to the land and sell the timber when it can be harvested.
On the flip side, even when your not selling the timber- you can also use the trees to launch your very own firewood business, chopping and selling the wood off during the winter months. When used as a source of timber, the type of tree will dictate how long it takes for the tree to mature.
A timber trees maturity can vary from as low as 7 years or all the way up to 50 years – it all depends on the type of wood you choose.
RV Storage
Believe it or not, many RV owners often don’t have the space to keep their precious RV’s on their own property.
Storage facilities across the country are filled with RVs, and all you really need is a bit of space on your land to store an RV. What some may see as the drawback, you will be required to give RC owners access to the land to of course retrieve their RV’s as needed.
RV storage fees can have a vast range of cost per month. Typically, indoor storage is of course the most desirable, but consider even if you could only fit 10 RVs on the property at $100 each a month, you’ll have $1000 in easy income instead of No income.
Keep in mind that an RV storage property will require fencing all around to store the larger vehicles. City ordinances will need to be researched and appropriately planned. In the event the land is not zoned for what is known as commercial use, legal problems could close the business before you even get a chance to open the doors.
Be prepared to obtain any necessary permits and tax certificates as required for the city or state which your property is in. Keep in mind, certain upgrades like being able to offer customers covered parking will increase profits and so ensuring the proper building permits and inspections are in place
Campground and/or Event Space
The rise of today’s microwave economy, hustle and bustle of society long with the big cities has led many individuals and families to choose to hit a peaceful stop to camp out and when taking time off and going on vacation. Many see time away from civilization as a break from life and responsibility.
As a landowner, people will literally pay to simply sleep and camp out on your land. You’ll want to find out just how much insurance would cost for your new business venture and the laws and regulations of the local city government.
Using your land for event space rentals can also render amazing profits and income to you the owner. From weddings, to company picnics, dinner parties and more, renting your vacant lot out can give you a large return on a very minimal investment. Imagine if you spend the Spring and Summer months renting your vacant lot out for events only twice a week at $1200 and event (which we know is low).
Doing this for 6 months of the year, gives you an additional $57,600 a year! Before you hang the paper lanterns and set up folding chairs, you will want to complete the groundwork first, making sure that the foundation of the vacant lot is firm and the atmosphere surrounding is inviting and safe, welcoming and attractive.
Solar Lease
Yes, Solar energy is thriving across the United States and solar developers are increasingly searching for land to host solar projects. Here is a major, must consider form of income using your vacant land.
If you have the money as a financial backing – installing solar panels is the way to go! Even without the financial backing, renting the land out to a company that wants to install solar panels on your land, could be a very lucrative option.
How does this work? The overall goal is to collaborate with energy providers and/or companies that desire to buy the solar energy produced on your land. A great deal of small businesses are showing up simply to begin creating their own solar farms and vending that energy right back to electric companies.
Although this can be a great way to make really good money from your land, you must consider something first. Successful solar farms are known to take between 2 and 5 years to from start to finish.
From the stages of permitting, financing, and construction are all significant tasks. Solar developers are aware of these stages. And they have been known to sometimes be mindful and take this into account. Sometimes asking for a short-term lease during the development phase followed by a long-term lease when the actual project is ready to be built. Get ready to be patient.
Stable Horses
Lots of dirt sitting around your property right? Vacant lots are great for horse stables which are currently booming. From age 4 and up there a plenty of people who want to own horses, but few have the actual land to accommodate these beautiful large animals who need space, which is great for you.
Your vacant lot may not have a building or renter but it has space. You can have your own horse stables available for rent, or you can own stables and horses starting a business of horse riding on your land.
Many owners have been known to install their own barns for horses, only to require $400+ per month. If your property is in a metropolitan area, you will find these prices are even higher per month in a metropolitan area.
Conclusion
And there are many more, from hobby farms to paintball areas, and outdoor wedding venues.
So here it is, with any aspect keep in mind there is some work behind it! To rent you vacant lot for events, you must advertise for rental. To create a solar energy source you must collaborate with an energy lender and or buyer.
Although there seems to be this crazy ideal that vacant land is a weak or unpurposeful investment. Above we have debunked some of the myths – it doesn’t produce income, it just sits there and nothing happens. With any aspect keep in mind there is some work behind it!
To rent you vacant lot for events, you must advertise for rental. To create a solar energy source you must collaborate with an energy lender and or buyer.
WRONG! It’s an unfortunate misconception because the truth is – vacant land is capable of producing some serious bank or should I say cash flow to help build wealth for you and generations to come. One of the best investments on earth – Land!
The natural beauty available to be rendered unto a piece of land such as the existence of trees, hills, photo worthy views, and water access, often yield higher value over time.
As we always say, do your research and continue to learn ways to invest in you and build wealth!