Florida Land Investments

A Guide for the Conservative
Real Estate Investor

You will not get the same leverage with land as you would with a house, but a building lot will still provide more appreciation than any other non-real estate investment. You can always build on your lot in the future.

Investing in Florida Land

Land prices in Florida have been skyrocketing, often moving up in price each month.

There are 52 different types of soil that you cannot build upon in Southwest Florida.

That statement alone should make you a little nervous. We haven't even discussed environmental issues, land clearing issues or the normal site selection factors such as schools, roads, neighborhood, etc. Nevertheless, I get calls all the time from someone who went online and is trying to tell me how much a lot should cost in a particular area.

For example, you can buy a building lot in Ocala for $35,000. When I put up a spec home in that same area, the lots I choose generally run around $50,000. Why the difference? My lot is not near a land fill, railroad tracks or an area where you need to be off the street after dark. Starting to get the picture?

I also get lots of calls for cheap lots or "acreage". Folks, it is now the 21st century and Florida land is fully valued. If you want large tracts of land here it will cost you an arm and a leg. Even agricultural land is at a premium.

Fortunately, there are thousands of lots for sale throughout the state that you can build on now or in the future and make excellent investments.

Here are some tips on buying land in Florida:

•	You must make sure it is buildable. It can cost you an additional $20,000 to make a lot buildable and there goes your bargain.
•	Your financing options are very limited. Unless your credit score is in the mid to high 700's, you are going to put down 30 %.
•	You need to be aware of local ordinances. I know of some individuals who bought a 9,000 sq ft lot where the minimum building size is 10,000 sq ft. Anyone want to buy a mini-park?
•	Watch out for environmental obstacles.
•	The Internet is not a good indicator of how much land should cost. Ask an expert.

About Location

1. You are looking for investment property. The best lot may be one that you would have never chosen for yourself.

2. The area does not have to be built up with a mall and three high schools to be a great deal. It is sometimes nice to hit a home run and get in on an area before it is completely developed.

Many times you will be standing on a lot and see nothing being built around you. You drive around the area and you see a home here and a home there. Maybe a few slabs are being laid. So you decide that this area is not for you. That might be a big mistake. Are you going to wait until the area is all built up before you buy? Take yourself out of the equation. If you rode around Cape Coral or Port St. Lucie two years ago you would have walked away from the $35,000 lots that now sell for $100,000.

Is It Buildable?

If you think that dirt is dirt, you might have an expensive lesson in front of you. There are many different types of soil that are not suitable for building. To make the lots buildable could require tens of thousands of dollars in fill. There are endangered species that can keep you from building on your property.

Watch out for local ordinances. One area has a minimum requirement of 10,000 sq feet. You would be amazed at how many sellers are trying to unload lots that are smaller and will be unbuildable.

Some builders want regular shaped lots. They will not build on pie-shape. This has implications where there is a septic tank.

Financing Land Purchases

Financing on land is not the same as a home and land together. Most banks will not finance property. When they do, they require a substantial down payment. The fact is, for the amount of money you might have to put down on a $100,000 lot, you could build a half a million dollar spec home.

Still, certain land purchases can yield handsome profits and many individuals are much more comfortable in this type of investment.

Like Money in the Bank

I view land as I would a very high yield CD. In almost all instances, land prices increase steadily and predictably. A lot in Ocala that you purchase for $70,000 today can easily be worth $90 - 100K in two years. I consider this an excellent return for a passive investment.

Use your IRA or 401K to buy land

One way around the financing problem is to use your IRA or 401K to purchase land.You can use a self-directed IRA to purchase land. For more information, go to our Self-Directed Real Estate IRA page

We Can Help

If you would like our guidance in finding suitable land investments give us a call or send us and email and we will call you.

Martin Unger
Real Estate Investments

- Pre-Construction
- Spec Homes
- Condos
- New Homes
- Land
- Relocation

954 - 255-5056 (office)
954 - 461-0319 (cell)
775-254-2881 (fax)

(an associate of London Realty Corp)

9000 Sheridan Street
Suite 90
Pembroke Pines, FL 33024

The information on this web site is provided as a guide for general informational purposes only and is not intended to be tax or legal advice. It is deemed reliable but not guaranteed. Please consult with your own attorney, tax advisor and/or accountant for specific advice. Martin Unger is a licensed sales associate in the state of Florida and works with London Realty Corp.