Take Advantage Of Canada’s Land Boom
For a lot of people, land is the ultimate investment, let’s face it, they are not “making” anymore of it. Investing in land may sound easy but this cannot be far from the truth, would you buy swampland in Florida with the risk of it collapsing into a sinkhole in the near future? No.
Whether you are a seasoned real estate investor or a complete amateur, there are simple steps to follow so you don’t end up getting ripped off and getting suckered into a bad deal. I would like to tell you five key stages within this guide; flipping land, buying an infill property, renting the land out, exploiting its natural resources and developing it yourself.
Zoning And Flipping Land
Flipping land that is not zoned can be a tricky and complex process, land that is not zoned can come with risks. The risks are things such as, in the olden days they used to dump oil drums and other hazardous materials onto land sites whilst developing other areas, if you were to buy a piece of this land, you would not be able to have it zoned for residential use, there for it would be deemed useless.
Though it could be very profitable, let’s take an example. Just a few Km from South Barrie, a 100 acre crop farm which is complete with a 3400 square foot Victorian home is currently selling at $1.7 million, or $17,000 an acre. Just 20 minutes to the north and you will be paying $433,000 per acre for a 6 acre piece of raw land or $2.6 million for the lot. The only reason why the second is a lot more is because the zone has already been surveyed and re-zoned for residential use.
The hard part of buying land is predicting whether or not your land can be re-zoned for residential use, the government which decide this only like to commit to 5 year land development plans and even then, those are subject to change and in some cases, they change massively.
The Need For Urban Infrastructure
In Canada there is tonnes of land for sale, if you are wanting to develop out in the middle of nowhere for yourself and your family then that is fine. Or if you find have some buyers in mind that would like to live off grid and become self sufficient, then that is also fine. Though many investors do not have people like this at hand or in their little black books. The only real way to make profit (Especially if you are land flipping) is to buy land next to urban infrastructure such as water systems, sewers, road access, public transport and more.
Land with public transport near makes the most profit!
Before even looking into purchasing you need you run your own checks for contamination, only those with deep pockets will ever get mixed up in land contamination, this is not for novices. To protect yourself against making these mistakes, pay extra to get comprehensive titles and find out what was build on top of it or near it since the past 50 years or more. If gas stations or mechanical shops were built on top of the land, you do not stand a chance of any profit, more like waste money buying a contaminated, useless piece of land.
Seeing It For Yourself
A lot of investors actually purchase virtually, but let me warn you, these are seasoned professionals. If you are buying from a distance you can rely on satellite technology such as Google Maps or other satellite imagery. The advice is, never buy any piece of land without seeing it unless you have a very solid reason for it.
Identify Potential Profits
If you are looking for a quick flip and the land was previously agricultural land, re-zoning means a heck of a lot of paperwork, paperwork equals time and time is a thing flippers do not have! To tally up profits you just get the tax-assessed value which gives the cost of holding the land each year. Then you just use publicly available real estate listings to compare the prices to similar land or properties, this gives you an idea of what you could earn on the future sale.
Divide & Conquer Technique
Buying land that has dilapidated buildings on that are falling apart is also a great technique for potential huge profits. So long as you are prepared to go through the demolition stage to completely flatten the area and dispose of the waste, do not let this put you off as you could build multiple properties on the same plot of land, this is called in-fill housing.
A perfect example is when a small 1,500 square foot bungalow in Toronto’s working class area was bought for a nice $360,000. The buyer had it torn down and demolished, he then built two semi-detached homes on and walked away with a nice profit of just over $160,000 in profit in just a couple of months, leaving him more than enough profit to start his next project.
So it can be done…. It just takes some thinking and a little strategy.
Category: Blog