There are many avenues you can take when investing your money.  Many people have turned to buying property.  There are various types of investment properties: rentals, commercial, raw land, etc.  Raw land is becoming one of the more popular investments to make.

As with any investment, buying raw land can be beneficial but is not without risks.  Many people decide that the risks are worth the opportunity.  Before investing in a plot of raw land, you have to weigh the pros and cons.  Look at what’s happening with the land around it.  You need to find out as much information about it as possible.

Pros

1. There is only so much land and we can’t make more

Once all the land is bought and built upon, there isn’t anymore.  Land isn’t a replenishable resource.  Once it’s gone, it’s gone.  We can buy and sell the same plot of land multiple times, but we can’t create more.

2. Low maintenance

With raw land you don’t have tenants to take care of or any type of building to maintain.  If you want to keep the land from becoming overgrown, you can hire a different company or if you have the time and resources, you can do it yourself.

3. Investment Portfolio

If you are trying to build an investment portfolio, it can add diversity to it.  You will be able to show that you understand various aspects of the real estate market.

Cons

1. It takes time to sell

If you bought raw land somewhere that isn’t fully developed yet, you have to be prepared for it to take time to sell.  Once the land near yours starts developing be aware of who you are going to target; commercials buyers or residential buyers.

2. Not guaranteed to make a profit

Like with all investments, there are risks involved.  You can’t determine what the future will hold.  You can make informed guesses as to what areas will be developed, but you don’t have any way of knowing for sure.  Even if the land around yours starts to develop and you do have the opportunity to sell, you might not get as much money out of it as you though you would.

3. You pay for improvements

As a landlord, you can use the money your tenants pay for rent to make any necessary improvements on the property.  When it comes to a piece of raw land, you don’t have tenants.  Any upgrades you would want to make before selling will be with your own money.

Before making a decision about investing in raw land, look around the prospective area at the average cost per acre.  Take the time you need to do enough research that you can make an informed decision.  Just remember that any investment has its risks.  You need to weigh the pros and cons and decide if it’s worth it or not.