Maximizing Your ROI Through Vacant Land Investment

A vacant lot perfect for your plans for maximizing your ROI through vacant land investment.

There are many ways you can approach making a vacant land investment profitable. Building an office, a warehouse, a family home – each option seems appealing in its own way, and it can be challenging to make your choice. Especially if your goal is to get the best return on investment possible. As can be expected, not every one of these is as profitable as it may seem at first glance. So, we’ve prepared a guide on maximizing your ROI through vacant land investment, where we’ll go over your options and the expected results of pursuing them. Furthermore, there are a few helpful tips to really make the most of your initial investment!

Maximizing your ROI through vacant land investment with an eye to the future

The first thing you must remember about vacant land investment is simple: you can’t do it within a city. Sure, some opportunities occasionally open up, but most of your investments will be focused on the fringes or suburbs of cities. So, if you really want to maximize your returns, you can’t just keep in mind the current situation. You also need to plan for the future and whether it will become one of the prime investment locations once the city develops. For example, San Diego has continued to grow steadily over the years. So your vacant land investment is guaranteed to become more relevant and integrated into the city. Of course, this will take a fair bit of guesswork, but you can still mark out the best investment opportunities relative to what sort of neighborhoods they’re near.

Choosing to build a commercial property

The nice thing about maximizing your ROI through vacant land investment is that you have total freedom of what you want to build on top of it. And building a piece of commercial real estate might just be the best choice! There are plenty of commercial real estate opportunities in San Diego, yes. But the nature of the city’s economy and growth means an insatiable demand for more commercial properties regardless. As such, you really can’t go wrong with investing in a commercial real estate build. There is also a fact that certain types of facilities, such as a warehouse, are immediately relevant and easy to rent out or sell. After all, businesses prefer areas with easy and unobstructed access to the warehouse when looking for storage space. 

Choosing to invest in a residential property build

Building a residential property is a bit trickier. As we stated previously, the locations where you can pick up vacant land are typically not as urban as the rest of the city. This means that local amenities are frequently lacking by comparison. In other words, it can be hard to rent out or sell the property at a decent enough price to really claim you got good returns on investment. Of course, you’d likely still see some interest, but residential properties are not the best choice. And this is the case even if you look for professional help to manage them.

Selling the land as-is

Naturally, you always have the option of simply selling the land as-is. And interestingly enough, this isn’t always the worst choice. Maybe you manage to snag a piece of land before serious development hits the area around it. In that case, selling it as-is can massively boost the value of the land you hold and make it a far better idea to just sell instead of spending additional money to build something on the plot yourself. Still, be warned that this is not a common scenario. The best plots of vacant land are typically snatched up before any serious plans are made concerning their development. As such, this minimal-effort way of generating ROI is not reliable. Nor is it really something you can plan for since you would need to be able to predict the thoughts of big land developers to make that work.

Subdividing your vacant land and selling it that way

An interesting trick for maximizing your ROI through vacant land investment is subdividing your land into smaller lots. This is perfect if you’ve invested in a massive stretch of land and the area you invested in is popular. Appreciating the land’s value means you can make an enormous profit, similar to what we just covered in the previous entry. It all hinges on the land generating interest and the fact that you own a lot of it, thus allowing you to increase the value of the smaller lots.

Leasing out the land

One of the oddest ways to earn money from vacant land is to rent it out. You can do this in two ways, and they differ in who your ideal ‘clients’ are. First, you can choose to rent out the lot for events. People looking to organize a fair, a concert, or similar typically look for vacant lots of decent size in which they can easily set up stands. The second option is to rent out the land to businesses looking for specific storage space types. They might want to park their truck fleet there or have storage containers they can simply leave on your lot. As the moving and storage experts from SF Moving note, this is not a long-term solution for these businesses, but it is still an excellent source of profit for you while they are interested in the arrangement.

Wait for the right timing and opportunity

The final thing you need to remember about maximizing your ROI through vacant land investment is that you are not in a rush. Sure, there are pros and cons of buying vacant land in San Diego. But vacant land takes no actual management or upkeep. So, as long as you want to, you can continue to wait. Picking the timing to do something with the vacant lot is entirely up to you, and patience is, more often than not, rewarded!

Pick and choose carefully for the sake of your investment

While we’ve presented the various ways of maximizing your ROI through vacant land investment as almost all-or-nothing ventures, they’re not. You can always subdivide your large lot and then use part to build while leaving the rest for future opportunities. Or you can make other combinations that seem appealing to you. As long as you carefully consider your options, we are sure you’ll be able to turn a profit!