How to Invest in Raw Land

By Forbes J. Douglas

Worthwhile investments naturally require careful analysis, and purchasing raw land in the southwest high country of Arizona, Colorado, or New Mexico is no exception. We believe that raw land investment is one of the better ways to increase your financial holdings, but doing your research and due diligence remains vital to your success.  

Questions to ask yourself:

What is the reason for this raw land investment in the Arizona High Country?

This will determine the kind of land you seek, its location, and price. For instance, you may be looking to invest in the Rim Country near Payson with the intention of building residential second home to escape the heat of the Valley of the Sun. Or, you may want to buy there only to hold the investment for a time as values continue to rise due to the many Californians moving in and paying California prices.

How can I get the information?

First, visit and become familiar with all of the area, from Payson through Heber-Overgaard and Show Low-Pinetop to St Johns, Eagar and Alpine. While the fierce development may now be in the areas most readily reached from Phoenix and California, all of the region is likely to see major increases in land value in the next decade.  

Check the present and possible future zoning for the land to determine if your development idea will work with city and county plans, or to know what kind of value it might have should you want to sell to a future developer. Study the history, political and cultural make up of Gila, Navajo and Apache counties to understand just how they may react to the changes brought about by so many new residents. 

How should I work with real estate professionals? 

Do not choose just any agent. Raw land investing is a real estate specialty, and you want to work with someone who is such a specialist and knows the likely future development of the area. I suggest that you work with several, compare their opinions and counsel. Even then, you may decide to buy directly from the owner rather than through an agency. 

In the White Mountains, you will find a number of owners individually selling off their family property. These are often better deals than those offered through an agency.  These are sometimes offered with owner financing. 

 
You can talk to farmers and ranchers. Be on the look out for tax sales and foreclosures, read the newspaper subdivision notices, research the Navajo and Apache county government websites, and generally immerse yourself in what is going on.

How do I choose a specific area?

Examine the rate of growth in Payson or Show Low versus outlying areas. The speed with which an area is developing will increase the speed with which your investment appreciates, but you want to find the areas where prices have not yet taken off. 

How do I finance it?

Although financing from banks on raw land is often not available, owner financing is often is. You will need a down payment. For agency-listed property, 25% or more is usually needed to cover the 10% agency fee and 3-4% closing cost. Buying directly from the owner allows you to negotiate more freely sometimes resulting in a nominal down payment. 

Forbes J. Douglas, mid-western Realtor® and vacant and farm land development specialist with 30+ years successful experience now retired to the Arizona High Country from where he operates a major national real estate books review website. He invites you to investigate the affordable, secluded Arizona cabin land opportunities available in the White Mountains’ Lakes Country of Northern Arizona centered on such picturesque and pleasant towns as Heber-Overgaard, Show Low, Pinetop and Holbrook. Check out his review website at http://realestatebooksreviewer.com/

Source: http://realestatebooksreviewer.com/

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