The price of land can drastically change depending on the purpose it used for, infrastructure changes in the city around it. When changing a piece of land from agriculture to commercial use, you can multiply your profits by as much as 10 times the original amount.
Land Banking Investment
Infrastructure changes can change the value of real estate in a very short period of time. This is because infrastructure makes people’s lives easier, therefore more and more people will want to live in that area. For example if there are no subways, trains, or highways near the property people would have an extremely hard time going to work or even shopping.
Imagine if there was no such a thing as the 404, 400, VIVA, or even Subway. Would you have a hard time getting around? I think you would, especially those who can’t drive. Therefore it is important to build infrastructure in order to populate your community and increase profits. This is why someone can buy a massive house with a massive property up north for almost 10 times less than they would have paid in the city.
Rezoning is another way one can increase their profits by nearly 10 times the amount. Rezoning is when you take a piece of land and change the purpose and/or use of it. For example, you can buy a house that is used for rent or as a place to live, and rezone to make it a business. Since the house is now being used for strictly business, it is worth a lot more.
Just by simply changing residential land into commercial property, you are increasing you profits by a large margin. You must also be aware of the location in which you want to rezone in. A family neighborhood might not want a house on their street to be turned into a commercial property. This is a very profitable investment opportunity.
Another extremely profitable real estate investment strategy is land banking. Land banking is when you buy undeveloped or agricultural land that is going to be developed over a period of time. Even though this can be extremely profitable it can take a long period of time. This is usually done by borrowing money from someone else.
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The above information is provided as a guideline and is not intended to give a professional legal advice. Please consult a real estate lawyer for their opinion on your particular case
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