Land Investment – Buying and Selling Land For a Profit

Everyone thinks that the purchase of land for resale is reserved solely for millionaires who have lots of money and making land residential or commercial development. The English term that defines this type of investment is “Patient Money”. There is no return on the money invested as long as it does not sell a portion of the land. On the other hand, is still paying taxes and other expenses without having the possibility of receiving immediate income.

Here are therefore a few ways to invest in the purchase of land:

Purchase of an individual batch: you buy a plot from a contractor and you keep it for future sale. Your land will take more or less of the value depending on the location where you purchased this land. If you buy in the countryside, your land will be probably an assessment which will be slightly higher than the rate of inflation. If, on the other hand, you buy in the city, and that there is more available land, you have a good chance to make an interesting profit. Normally, the majority of the profit is made by developers and entrepreneurs, and there is not much for the small investor.

Purchase of agricultural land: the goal here is to play the role of the developer a little and buy land to resell it then ready to build lots. There is however a snag! You’re going to need lot of money! First, to buy the land and then to the dezone, to make plans, to make the subdivision to install infrastructure (water and sewer) and finally, to sell each lot. One speaks of a wait of approximately 2 to 5 years if your land is dezone quickly. I know a family of Montreal’s South Shore, awaiting the dezoning of agricultural land to industrial land since 1989. They tried to sell the land of four million feet square without ever finding takers so far.

Purchase of land in a group: there are companies that specialize in the in the Canada. They buy agricultural land between two cities or the population grew at a breakneck pace. They separate the land into plots of approximately one acre and sell each acre to private investors. During this time, the company gets all the city permits, made urban development planning, and gets all the required zoning according to the specifications of the city. The area is now ready for sale to developers, which see it as a clear advantage, because everything is ready for them. They have nothing to do, except build! The beauty of participation in such projects can use funds from RRSPS, cry and even a TFSA. The security of such an investment is based on the fact that investment is based on a tangible which is the ground. Another advantage is there is no need of expertise in real estate, because they are professionals who take care of everything. Previously, such investment was reserved only for millionaires; now, it is much more open and accessible to all.

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