Flipping vacant land is a type of real estate investment that’s often overlooked. Flipping houses can have its own benefits and drawbacks. It can also be more expensive and a little harder to secure the property if you live out of state. However, flipping land might be a better option for your situation depending on factors like the locale, budget and sweat equity you’re willing to put into the project.
Here are some of the main pros and cons of flipping land:
Land Flipping Pros
Low Competition - From a business perspective, flipping land comes with wide territory and low competition. Since you aren’t restricted to a single geographical area, you’re able to reach potential sellers and buyers across the country. Plus, with the vast amount of sectioned land still available, there is plenty of room for competition.
Ongoing Income Possibility - Through seller financing or working with lenders, you can turn your land flip into an ongoing income stream. Buying land with cash and selling with terms can mean regular monthly rent or mortgage payments in your pocket after the initial sale.
Land Flipping Cons
Active Investment - Flipping land one time seems simple, but making a business out of it requires a lot of work. To maintain steady activity and profits, you need to keep up with marketing efforts and prospecting. Buying and flipping land for profit is an active investment, which means you’ll need to stay on top of your business efforts regardless of cash flow.
Selling Can Be Tough - While finding land to buy might be easy, selling it can be more difficult. Most land flippers find that their primary source of frustration and bottlenecking occurs in the sale process rather than in the buying and improvement process. You may need to hold on to your improved land properties for a while before finding the right buyer.
Flipping land might be a relatively uncommon form of real estate investment, but it definitely has its advantages. Keep these pros and cons in mind when considering whether it’s the right way for you to get into the flipping business.
About the Author
Carolyn Andrews
Carolyn Andrews has over 30 years licensed Brokerage experience in both California and Colorado. Born in England, Carolyn moved to California in 1980, then relocated to Denver, Colorado in 1991. Carolyn has also received recognition for Top Sales at RE/MAX Alliance Aurora in 2007-2008 and is a member of the RE/MAX Hall of Fame & Chairman’s Club, as well as a recipient of the ReMax Lifetime Achievement Award. Carolyn has sold over 2000 homes personally in her career. Carolyn has been actively involved in many aspects of the Real Estate business including investment property, luxury homes, mountain resort property, skiin/ski out, REO/default management, loss mitigation, valuations, and disposition. She has been a speaker and panelist at several conferences and has been consulted on many occasions by various organizations in the REO/financial industries for her expertise and served on many boards. She has attended numerous ongoing classes to stay abreast of changes in the ever-evolving Real Estate industry. She is the prior State Director for Colorado for VAREP(Veterans Association of Real Estate Professionals). She is a member of 3 boards of Realtors including Metro Denver, Colorado Springs and Summit County mountain areas. She heads up The Andrews Group and is or has been an active member of NAR, CAR,REOMAC, CIPS, CRS, AREAA, NAPW, NAHREP, and is an original member of the ELITEReal Estate network. She was ranked #1 for most homes sold in Denver 2007 by Denver Board of Realtors, #2 for 2008, and #2 for 2009, #5 in 2010 and #4 in 2011 and has been consistently in the top 10 ever since. Carolyn Andrews has been a top rated Endorsed Local Provider for the Dave Ramsey Organization and also a Top Producing agent for 2018 for the Homelight Company.
