I love land. I am not ashamed to share that. When I started in this business, I worked for an agency that focused on Downtown Nashville condos. I was not a fan of that market; I could sell condos but did not LOVE IT. Then I met my land mentor.
I spend hours learning about raw land. What is needed to build on it? What percentage of the total cost should land be when building a home? What type of land is best for cattle, goats, or horses? What is the Greenbelt Tax Code? Why does elevation matter? What is a water table? What is the best type of driveway (gravel, peddle, concrete, blacktop)? Can you build away from the road at the top of a hill? How much does soil work, driveway planning, water lines, or power poles cost? Do my clients like Netflix? If so, what cell or interest service is available? I learned so much, and I loved it.
I proudly say today; I do not focus on Nashville condos because I like to argue over acres, not inches. There are multiple characteristics in raw land, making the value different for each buyer. And every tract of land is like a snowflake.
The process of examining land mainly comes once it is under contract. The contingency or inspection period for a land contract usually is longer than a home contract. More time is needed. It takes state-licensed vendors (surveyors, Soil Scientist, Water Scientists) or county inspectors a while to get on site. While I am only a licensed Realtor, I have learned the crucial questions to ask to determine the timeline.
Land investments are more of a “buy and hold investment” than other real estate investments. Tracts of land in Tennessee are available from $5,000 to $5 million if you want to pay cash. Typically, land loans require a larger down payment than home loans because the bank does not have a home to sell as collateral.
When you invest in land, there are limited expenses. There are no renters to find or rent to collect, no HVAC to replace, or repairs when tenants move out. The only actual cost for raw land investment is the annual property taxes. Tennessee has some of the lowest property taxes in the US. Plus, land may have marketable timber or annual hay production that could cover the cost.
I like being able to help people buy an investment that I would buy myself.