Many prospective buyers today are looking for innovative ways to invest that give them some leverage in the market, whilst keeping the headaches of bricks and mortar investments at arm’s length. A good starting point could be to invest in land, but how do you make good investment choices with a piece of dirt? Then, once you own it, how can you make it work for you? The term ‘land flipping’ refers to the purchase of land that has investment potential, that you then on sell at a profit when the timing is right. When done correctly, it can be one of the simplest and most effective ways to make a quick profit.
1.Unlock your land’s potential
You only need to photograph a piece of land to understand the difficulties involved in marketing it as a viable investment. With a bit of creative thinking, you can turn even the humblest patch of dirt into somebody’s dream. At the very least a property will be marked out to show its boundaries on purchase, but it’s really up to the owner then to decide on what happens inside its perimeters. Much like home staging to show buyers the best potential of a house, ‘land staging’ might also be a thing! A cheap but unremarkable piece of land, can be transformed into a family’s dream with a few strategically placed markers. Marking out a rudimentary fence line more clearly defines the size of the block, and hiring a grader for a few hours can clean up any potential presentation problems (we definitely don’t mean trees – you may need council approval). Adding some personal touches to photography can help too such as a mailbox out the front, some cane chairs and a small table under that gorgeous tree up the back, or even a swing hanging from its strongest branch. These are all small and inexpensive touches that turn a flat piece of land into something more – improving the perceived value that by default improves its resale value.
2. Location is everything
The most successful property investors are those who study the market and make educated decisions about what is going to happen next and where. A great way to make an easy profit is to look for opportunities around new and emerging developments and infrastructure. In some cases, this can end up being a longer-term strategy but it can certainly pay off under the right circumstances. Things to look for are semi rural land parcels that may fall under council rezoning plans, blocks at or near the location of a new development such as a new university, hospital or shopping centre and land that will benefit from new infrastructure such as near a forthcoming station on a new train line.
3.The power of division
In rural areas this is a particularly effective strategy, especially if local councils are planning to rezone the area around your block. A 5-acre rural block that suddenly finds itself in the paperwork for a whole new suburb means what was formerly your kids pony field may be sub-divisible by three. Keeping on top of council plans or even just understanding what the local zoning regulations allow you to do can be lucrative. Being able to subdivide and sell off small parcels of your land at different times can give you ongoing opportunities, especially if regional demand is being created. The best approach is to research regional areas, do your homework about which areas are tipped for growth, and get in early when the opportunity arises.
4. Be a problem solver
Sometimes a block of land can sit on the market for some time and often the perceived problem is easily solved. Keeping this to yourself however, snapping up a bargain, and making a few adjustments can reap great rewards. Some blocks do come with inherent issues, but there are almost always solutions, that sometimes just cannot be visualised. Buyers are easily deterred by sloping land for example, but a simple excavation can fix that problem, along with photos of the breathtaking views they could have if they built a split-level property on that site. Access issues can also scare people off, so clearing some branches or putting in a proper driveway could be all that’s needed to get people across the line. Sometimes it can be as simple as clearing blackberries or getting a skip in and clearing rubbish away. If you have a developer’s mind and are not afraid of the challenge, then your ability to design solutions to problems that seem insurmountable to others, could be the difference. Buying the land, solving the problems and even getting development application (DA) approval can be a simple project to you, but make all the difference when you on sell.