Residential Land Development as a Profitable Investment

This post is sponsored by one of our Trusted Partners, Darcy Marler. To become a contributing editor, please contact our Real Estate Investor Solutions Specialist, David Maxwell at david@reincanada.com.

Most of us invest in Real Estate to gain the freedom to live the lifestyle we desire. To work less and have more time to spend with our families with extra money to enjoy it. Yet, too often, flips and rentals result in us spending MORE time away from home, not less. What if I could show you how to use Land Development to make more money per project with much less time? You can buy back your time! 

A common belief about Land Development is that it is just for large companies on the outskirts of town, developing hundreds of lots over many years. What if you were to find out that there are Micro-Strategies within Land Development that allow average-sized investors to participate and profit as well? That you can do this too.

Micro-Strategies such as:

• Buy an old house, tear it down, sever the lot into two, service both lots and sell to a builder
• Buy a property with excess land, sever the excess, sell that, and keep the existing building 
• Land Assembly: combine two or more lots and get them ready for an apartment or townhouse project
• Upzoning: changing the zoning, density, or usage of a lot to increase its value

This opens up an entirely new world of possibilities for the average residential Real Estate investor who is used to just having flips, rentals, or some mix of the two in their toolbox. These Micro-Strategies allow investors of varying-sized budgets to get into development. Lots don’t have to be hundreds of acres; they can simply have 30-foot or 50-foot frontage. In most cases, your costs will be similar to a flip, while your profits are potentially significantly higher. 

As your planner or civil engineer will be doing most of the work in the planning, application, and onsite phases, you will spend significantly less of your time on each project than on a flip or condo conversion. Then, as the profit from one Land Development project is usually much more than these other strategies, you get a very favourable Return on Time. Suppose you are finding flips or condo conversions too hard or too time-consuming and want to get your life back, the time you can spend with your family or improve your lifestyle. In that case, you owe it to yourself to look into the advantages of these Micro-Strategies in Land Development. 

This new world will become increasingly more important over the next few years. There is ever-increasing immigration at the same time that there is a current housing crisis. We constantly hear that the younger generation can’t find affordable homes to buy or rent. More commonly, that more youthful generation also wants a new product. In general, they don’t want to live in a renovated 1930s home. Retirees, too, want a newer product. As a result, over the next five or ten years, you will see more and more of those pre-1960’s homes torn down and replaced with higher density. 

Therein lies the opportunity. It is supply and demand. Using the Micro-Strategies listed above, regular Real Estate Investors can significantly add to the supply of building lots, lots that builders can then use to construct new product with higher density. Let the big companies do their thing on the outskirts of town, while you profit from transforming the inner city, one old house a time. You can be part of this coming wave.

Another advantage of these Micro-Strategies is that you don’t have to do an entire project. You can just move the needle. For example, with a flip or a condo conversion, you have to finish the project to maximize the resale value. You can’t sell a half-finished flip and expect to get top dollar for it, not so in Land Development. You can just change the zoning, sell it to the next person, or tear down the house and sell it off. This allows for multiple exit points, which reduces the risk of the project while also allowing you to keep your costs low. 

I offer the first Land Development online course, written by an investor for investors, that teaches these Micro-Strategies and how to profit from them. Eleven hours, taken at your own pace, will give you the confidence to go out and do your own projects. Take advantage of THE NEXT BIG THING in Real Estate Investing. For more information, we hold an informational Webinar. Register here https://bit.ly/3Lv82MJ

There is more to Real Estate Investing than Flips and Rentals.

The author: Darcy Marler has more than 20+ years in Real Estate Investing and owned more than 90 properties, with over 240 doors and close to 1000 tenants. He has done all of the Residential investing strategies, including Land Development, Land Assembly, New Construction (built 45 new homes), Flips, BRRRR, Condo Conversions and Long and Short-Term Rentals. Darcy has written four books on Real Estate Investing and has an Online Course on Residential Land Development as a Profitable Investment.