Know Why People Invest
A 2015 LANDTHINK Pulse survey showed that 50.9% of land investors consider themselves to be long-term investors. Many investors know they won’t be seeing large, quick returns anytime soon and are instead looking for a safe place to slowly and steadily grow their wealth. This money is often used as part of a retirement fund and held onto for generations. Understanding why people invest in land can help you tailor your property listing, make the appropriate upgrades to your land, and market your land to potential long-term investors.
Since investors typically care more about the financial outcomes than sentimentality, they have a different mindset and goals than other clients, as RLI member Steve Bruere pointed out in his article What Investors Want.
“Often times, investors looking to purchase farmland are looking for large, contiguous tracts with significant scale,” says Bruere. “Investors are not emotional and don’t have to buy the piece next door. They aren’t driving by the showplace farm their entire lives on the way to the co-op knowing they will do whatever it takes to buy that piece of land if it comes to market. Investors are typically focused solely on the financial returns of the investment. Therefore, they are naturally more conservative than the farmer buyer, who may look at a potential transaction as a once-in-a-lifetime opportunity.”
Keeping in mind that many investors look for land with the distant future in mind, the improvements you add to the land should be focused on creating long-term value. Some examples of ways to increase the long-term value of a property include:
- Making sure access to the property is as clear as possible. You’d be surprised how much taking down a few dead branches and sweeping away debris can do for curb appeal.
- Mending any broken fences and having clearly-marked property boundaries.
- If you have recreational land, building a food plot. Having several food plots throughout the property can help attract, nurture, and keep deer on your land, making it much more valuable to hunters.
- Adding power to your property. This comes with a large upfront cost, but many investors prefer properties with electricity.
Of course, there are some factors that you have no control over, such as where the property is located and the local laws impacting the property. However, improving what you can change about the land will help raise its appeal for potential investors.
Know What Your Land Has To Offer
What does the land have that will add to its value? Is it within driving distance to a city? Good soil type? Located in an in-demand area? Mineral rights? Any of these factors will add long-term value to your property. Be sure to mention these benefits in the listings.
Attracting investors to your property can be tricky, especially with so much international and local competition for funding. However, these tips can help you tailor your marketing plan and the land itself to attract more investors to your property.
Ask a Land Expert for Help
If you are thinking about selling a property and want to know the best ways to increase its value for potential investors, make sure to find a Land Consultant near you who has specialized expertise in land transactions and a wealth of knowledge about land investments. We highly recommend using a certified land expert, like an Accredited Land Consultant (ALC), to ensure you get the most value out of your land transaction.