Why Has That Lot Been Vacant For 6 Months?
Posted on: 27 July 2018
As someone who's just getting started in real estate investment, you may assume that investors will jump at the opportunity to buy a vacant lot. Quite often, this is exactly what happens. However, in certain cases, you'll notice a lot staying vacant for weeks, one month, and sometimes even six months or longer. This may not make sense when people are rushing to buy up property in that neighborhood.
Before you rush to snap up the property, it's a good idea to first find out why everyone else seems to be turning their nose up at the lot. There are many good reasons why this happens.
There Might Be Better Alternatives Nearby
Sometimes, the reason why a lot remains vacant is simply that there are better lots in the same neighborhood. This doesn't mean that it's not a good lot, however, if investors can find something with a better location or price in the same area, they may not have a reason to focus on that particular lot. This may also mean that the property has a price tag that's too high for what it is. Even the best lot has a maximum price.
The Neighborhood May Not Be Ideal
Quite often, a single lot with all the right qualities will be ignored if it's in the wrong neighborhood. A neighborhood with high crime rates, high levels of pollution, too much noise, etc. will scare away potential investors. As an investor, you may find it difficult to find tenants, or you may have to charge a very low rent. Even if the lot is cheap, it may not yield substantial returns.
The Neighborhood is in Decline
When a neighborhood is in decline, you may see more than one vacant lot in town. Even if you can get the lot for a low price, investing in such a neighborhood may not be a good idea. Look for signs that can tell you what the economic health of the neighborhood is like. If the anchor tenant at the nearby mall just moved out, the future of the neighborhood may not be bright.
The Lot has Hidden Issues
Just because a lot looks good doesn't mean it is. The ground in the lot may be contaminated, or it may need to be level, among other issues. Look for land surveying services and also consult with other experts to find out if the lot has problems you may have missed.
For more information, contact a company like Bankers Real Estate.
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