Building Lots are Hot! Vacant Land for Cash Investors

Search Outer Banks Lots for Sale Here or read about why there is money to be made on land for the cash investor. Right now the timing is perfect.

Vacant land is not getting the respect it deserves from investors in our market but this is a mistake. Many lots were  sold in 2012 when we experienced a brief, mini boom in construction but it hasn’t been sustained in 2013. Land is still selling and new construction is happening successfully all over the Outer Banks but I wouldn’t call it a boom or a trend … yet. A few wise investors and builders are taking advantage of this window of opportunity.There were 223 housing starts in 2012, compared to 157 in 2011. Starts were weak every year going back to 2007 as well. Land sales were proportionately slow in those years. We are on the cusp of a building resurgence and land prices will be affected fast.

Vacation rental owners who are savvy have already responded with rent increases. That is the precursor to a run on building lots. Shrewd investors should be looking for lots as a buy and hold. In the next 5 years tremendous gains in land values could be a reality. Whether the investor builds it out or simply turns it as inventory the potential for a nice profit and the return of 1031s in in the cards. Land is easy to own, and requires no real upkeep but the taxes and maybe a quarterly mowing. Investors looking for a short buy and hold need to get started now in anticipation of rising demand. The rise in rental demand can only lead to a push for new inventory in the rental programs. Waiting till its already in full swing is going to be too late in some cases.

Land is hot because we have gradually filled all the excess bedrooms built in 2003-2007 with tourists who just keep coming and apparently they are telling their friends. The Outer Banks Chamber of Commerce reports a 10% increase in occupancy tax this year to date.  The visitation numbers since 2002 have steadily risen every year but one (2009). The economy at large does not seem to affect our tourist industry, which is the underpinning of the local economy. With adjustments in the real estate and construction industries to “the new normal,” life seems back on track around the beach, or at least headed that way. Investors would be wise to recount the speed with which the last recovery took hold in 2002. Some investors literally got rich just staying one step ahead and acquiring as much lot inventory as possible for resale. Land became precious fast, as it will again. Builders and investors will satisfy the demand for more rental inventory.  New construction and design is what the renter is looking for.

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