Just about everyone knows about the advantages of investing in real estate but fewer people are turned on to investing in Land. Yes, there is a distinction. Whereas “real estate” covers all sectors of the market – i.e. single-family, multi-family, commercial, industrial, etc. – investing in land is about owning the land and not the buildings.

Specifically, investing in land covers undeveloped land, vacant land, ranch land, and farmland. If you didn’t know you could own these properties, then you are missing out on an opportunity to make money. As such, here are some tips on how to get rich investing in land.

Flipping Land

You already know how renovations and house flipping works; with a whole home remodeling, you can purchase a home for a smaller price tag and and sell it for significantly more than you’ve paid. Similar to flipping houses, you can also flip undeveloped properties. The attraction here is that you usually get the land at a discount as it is not generating any income. However, this strategy is not without risks as you either need to be able to invest in improving the land or know a buyer who is willing to take the property off your hands quickly.

If you time the purchase and sale correctly, you can be in and out of a given parcel in four months or less. Just make sure that you do your due diligence and any properties with issues, such as groundwater contamination, lack of utility hookups, or a dry well might require additional investment to attract buyers.

Land Banking

This approach is slightly different than flipping as it usually involves holding the property for a longer time period as well as improving the land in some way. In many cases, the improvement is as simple as petitioning the local zoning committee to update the use for the property – such as reclassifying farmland for commercial or residential use.

Don’t think that land banking is exotic as it is actually quite commonplace among property developers. The trick is to identify undeveloped parcels on the outskirts of metropolitan areas. These can either be large tracts of land or as usually is the case, smaller parcels and that may have been part of a larger tract years ago.

What you will want to do is to acquire the land, or even the rights to the land through a real estate option contract, and then make the improvements needed to increase the fair market value of the property. As mentioned, the improvements can be as simple as petitioning the local zoning board, though you will either need to know the process yourself or be able to pay an attorney to assist.

Check out available land ranches across the country. Granted, not all of these properties would be ideal for land banking, but some might fit the bill. 

Another advantage of this approach is that you can continue to lease the property, assuming it is a working ranch, while you are gaining approval from the zoning commission. If the ranch is large enough, then you can even subdivide it as this will help you to maximize your profit potential.

Develop It

You might think that developing a property requires deep pockets. While you’d be correct, this doesn’t mean that it needs to be your money. In fact, developers often use joint ventures as a way to get the financing they need for their projects and this approach can help an aspiring developer to gain experience while working with a more established developer.

The key is to find the right parcel, then acquire the land outright or get an option for purchase. The latter would lock up the current owner for a period of a year or two while you finalize the financing for the transaction. This ensures that another buyer cannot take your idea and run with it.

Keep in mind that if you chose the joint venture route to develop your first land transaction that you will have to give up some of the profits. While this might sound antithetical to getting rich, it also means that you have spread out the risk and if your developer is more established it will be much easier to get the financing you need to complete the project and start earning revenues.

Remember 100 percent of nothing is still nothing, so if you want to become a developer and don’t have deep pockets, then look into joint ventures as a way to get your first development off the ground.

Lease It

If you like the idea of acquiring undeveloped land but you don’t want to develop it, then consider leasing the property. While this approach assumes that you have the right zoning approvals, signing a long-term lease with a good tenant for your rental property is a great way to get rich investing in land. All you need to do is to acquire the property and the watch the payments roll in month after month.