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
Kimberly Hering
Kimberly Hering's devotion to helping people achieve their real estate goals stems from her genuine enjoyment of the process. Whatever the task, Kimberly makes it her mission to get it done, however she can, without compromising her client's needs. Often, that means thinking outside the box. After working with Kimberly, clients describe her as being Trustworthy, Creative, Patient, Highly Skilled, Attentive to the Process and having a lot of Integrity.
After spending more than 15 successful years working on Wall Street, Kimberly transitioned into Real Estate, joining Alain Pinel Realtors, then moving to Zephyr, now Corcoran Global Living, in 2018. During her career on Wall Street, Kimberly was a Vice President working as an Institutional Equity Salesperson for Montgomery Securities for 10 years. She covered the top money managers throughout the US and Canada. She joined Jefferies & Co as a Senior Vice President managing the Western Region Institutional Sales group, while continuing to cover the top money managers.
Kimberly leverages her extensive experience selling equities to top money managers throughout the US and Canada, to successfully negotiating any Real Estate transaction seamlessly for her clients. Kimberly is well versed in Marin's neighborhoods, towns, cities, and education system.
Living in the Bay Area for 35 years, 25 years in Marin and having 2 sons in local Marin schools, Kimberly spends a lot of time volunteering in the community and serving on various local Boards. Kimberly has a collection of resources ranging from the best local breakfast spots to vetted contractors. With her reliable list of valuable resources, Real Estate experience and unsurpassed knowledge of Marin's many communities, Kimberly can guide her clients through every aspect of a Real Estate transaction seamlessly.
Relocating to Marin, downsizing, upsizing, first time home buying, final home purchase or sale, or a lot to build a dream home, no matter the undertaking, Kimberly works seamlessly until the job at hand is completed with 100% satisfaction.