Investment Land Feasability
- Land Location |
- How to Buy Land |
- Land Features |
- Investment Timing |
- Opportunity Costs |
- Community Acceptance |
- Single Lot Investments |
- Residential Lots |
- Speculative Lots |
- Lease vs. Resale |
- Building to Suit |
- Acreage |
- Acreage for Resale |
- Land Evaluation |
- Land Promotions |
- Land Bankers
Investment Opportunity Costs
Whereas mortgage payments and property tax cash outlays during the holding period are fairly obvious, opportunity costs for the equity invested in the land development are all too often ignored.
While the interest paid on a debt can be easily identified as a cost for maintaining the investment, the interest not earned on the cash invested in the property must also be included as a holding cost. The rationale for this practice is based on the present-worth principle. If this money were invested, it would generate a profit. Therefore, the money not earned on the capital invested should be considered as carrying costs.
Land development speculation requires a greater awareness of timing than many other real estate investments, because most land does not produce income during the holding period. It is held by the investor pending a rise in value. The longer this interim holding period, the lower the investment's annual yield will be.
- Land Location |
- How to Buy Land |
- Land Features |
- Investment Timing |
- Opportunity Costs |
- Community Acceptance |
- Single Lot Investments |
- Residential Lots |
- Speculative Lots |
- Lease vs. Resale |
- Building to Suit |
- Acreage |
- Acreage for Resale |
- Land Evaluation |
- Land Promotions |
- Land Bankers
