Is Land a Good Investment?

The short answer is yes — land can be an excellent investment. But not in the way most people think. The common image of buying a farm and watching it appreciate over decades is one approach, but it's not how most successful land investors make money. The real profits come from active strategies: buying undervalued parcels, improving them, and reselling — often within months.

Why Land Is Different from Other Real Estate

Land has characteristics that make it uniquely attractive compared to houses, apartments, or commercial buildings. There's no roof to replace, no tenants to manage, no plumbing to fix, and no property manager to pay. Carrying costs are minimal — typically just property taxes and loan payments if you're financing the purchase.

This simplicity is a major advantage. A land investor can manage dozens of deals simultaneously because each property requires almost zero ongoing maintenance. That scalability is why many investors who start with houses eventually move to land.

How Land Investors Actually Make Money

Strategy 1: Buy Low, Sell at Market Value

The most common land investing strategy is buying properties below market value — often from motivated sellers — and reselling at or near fair market value. Investors find deals through direct mail, online listings, county tax records, and other sourcing methods. The profit margin is in the purchase, not the appreciation.

A typical deal might look like this: buy a 5-acre rural parcel for $30,000 from a seller who inherited it and wants cash. List it for $55,000. After closing costs and holding expenses, net $20,000+ in profit. Repeat.

Strategy 2: Subdivide and Sell

Buying a large parcel and subdividing it into smaller lots can dramatically increase total value. A 20-acre property worth $100,000 as a single parcel might be worth $200,000 or more when split into four 5-acre lots. The subdivision process involves surveying, platting, and sometimes road or utility work — but the value creation can be substantial.

Damen Capital offers subdivision loans with partial lien releases, so you can sell individual lots as they close without paying off the entire loan first.

Strategy 3: Sell with Seller Financing

Instead of waiting for a cash buyer, many investors sell land with seller financing — allowing the buyer to pay over time. This expands your buyer pool dramatically because most people who want to buy raw land can't get a bank loan for it.

Seller financing creates a stream of monthly payments. But if you want immediate cash instead, you can sell the resulting promissory note to a note buyer at closing — turning a financed sale into a lump sum. Some investors net the same amount as a cash sale using this approach.

Strategy 4: Entitle and Resell

Adding entitlements — zoning approvals, permits, utility connections, road access — to raw land significantly increases its value. A parcel that's zoned agricultural might be worth $50,000, but the same parcel rezoned for residential development could be worth $150,000+. This strategy requires more expertise and patience but offers some of the highest returns in land investing.

What Makes a Good Land Investment?

Access. The property must have legal and physical access. Landlocked parcels with no road frontage or easement are extremely difficult to sell at any price.

Location relative to growth. Land near expanding metro areas, new infrastructure, or growing communities tends to appreciate faster. Properties in the path of development — even 5-10 years out — can offer significant upside.

No environmental issues. Flood zones, wetlands, and contamination can make a property nearly worthless for development. Due diligence on environmental factors is essential before purchasing.

Realistic pricing. The number one mistake new land investors make is overpaying. A property purchased at 50-60% of market value has a built-in margin of safety. A property purchased at 90% of market value leaves almost no room for profit after holding costs and selling expenses.

The Risks of Land Investing

Land investing isn't risk-free. Properties can sit on the market longer than expected. Market conditions can shift. Environmental issues can surface after purchase. And unlike rental properties, vacant land doesn't generate monthly income — it costs money to hold.

The biggest risk is overpaying. If you buy at the right price, you can weather slow markets and unexpected delays. If you overpay, even a strong market can't bail you out.

How to Finance Your First Land Investment

Financing is often the biggest barrier to getting started. Banks rarely lend on raw land, and even when they do, the requirements are steep. Most active land investors use one or more of these options:

• Private land lenders — loans that close in 7 days with 20% down. See loan terms →
• Cross-collateralization — use equity in existing properties for zero-down financing. Learn more →
• JV equity + debt — a partner provides the down payment, a lender covers the rest. Zero cash out of pocket. How it works →
• Seller financing — negotiate directly with the seller for terms. Seller financing guide →

Is Land a Good Investment in 2026?

For investors who buy at the right price, execute a clear strategy, and manage their holding costs — yes, land is one of the best investments available. Low carrying costs, minimal competition compared to houses, and multiple exit strategies (cash sale, seller financing, subdivision, entitlement) give land investors flexibility that other real estate investors don't have.

The key is treating land investing like a business. Underwrite every deal carefully. Know your exit before you buy. And have your funding lined up so you can move fast when the right deal appears.