Buying Vacant Land: 5 Essential Things to Know

When you think about buying vacant land, your mind probably goes straight to building a new home or commercial space. While that’s a great goal, it’s not the only way to generate value from a property. A vacant lot holds untapped potential for creating income, sometimes even before you break ground. From leasing the space for solar panels or RV storage to creating a seasonal destination like a pumpkin patch, the possibilities are vast. Whether you plan to build immediately, hold the land as a long-term investment, or get creative with its use, understanding its full potential is key.

Real estate investors know that buying vacant land can solidify one’s financial stability or work against it.

The balance comes in knowing exactly what to look for and what to avoid. Real estate developers who have learned how valuable vacant land is making sure to not pass on a good deal when they see it.

But equally important, they know what types of land characteristics to settle for and which ones to steer clear of.

Looking to build? Check out site plans for architecture and landscape design by MySitePlan!

Benefits of buying vacant land

Vacant land is a limited, valuable resource. While location is a factor, buying land is generally a safe investment. There are several benefits to buying vacant land and developing it when the market demand makes it the most lucrative to sell. 

Even if the return on investment isn’t immediate, there are many benefits to owning land:

Costs Less to Purchase Than Residential or Commercial

There’s nothing wrong with buying an already finished residential or commercial property. However, more often than not, buying vacant land and building the property that one desires ends up being cheaper several times over than buying a finished property. Vacant land usually has:

• Minimal carrying costs
• Lower property taxes
• Lower maintenance costs

And vacant land is a blank slate that you can develop however you please (within the zoning laws, of course.)

Capitalize on Market Trends for Higher Gains

The term 'cheaper', however, can be very relative. In most real estate deals, the element of timing is very important.

For that reason, an investor may see it fit to buy an already finished property at an astronomically higher price in order to seize the opportunity that the markets present at that point as opposed to buying raw land and developing it. 

On the other hand, a different investor may seize the opportunity of market trends to buy vacant land and develop it to meet specific market needs.

Either way, timing is important to help make the choice that’s best - because wrong timing whether buying a finished property or vacant land can end up being very costly.

Almost Never Depreciates

The truth is a good number of people express hesitation in buying vacant land, even though they know that they can eventually make a fortune from it. Vacant land will appreciate in marginal market conditions because it is a hard asset that is a scarce resource. But waiting can prove difficult for some investors even though they know vacant land is a safe long-term investment. 

The best part about a good land buy is that it almost never depreciates from the value of the purchase and almost always appreciates in value. 

This is the core benefit of buying land. 

For the most part, buyers may hesitate because they do not know what to look for and are afraid of making a bad business decision.

With the right help of a knowledgeable real estate team, excellent landscapers and home or commercial property builders, one has nothing to worry about as they can get help with property assessment of the vacant land before purchase and figuring out whether it’s matched to one's needs. 

Can Develop The Land as You Please (Within Zoning Code)

Another benefit of buying vacant land is that one has the opportunity to design their property according to their preference within the zoning code.

Buying pre-built houses means one ends up with a generic looking house without any stamp of their preferences or input. 

With the help of professionals, one can customize a property to reflect their own sense of style by giving the building a unique signature.

Secondly, the building phase can be done in phases depending on the availability of funds. 

Less Competitive than Residential Real Estate

Given that the competition for vacant land compared to finished properties is less, chances of investors landing an amazing location for a very affordable price are higher. Once a property has been finished, the value of the place is likely to steadily rise into a handsome profit at the point of selling or renting the property. 

Lower Market Rates with Seller Financing

Because banks and other traditional lenders view vacant land as a speculative investment, they are less likely to provide financing. Many times the property sellers will act as the lender and offer lower market rates to attract buyers.

Financing for the property will largely be influenced by how you plan to develop it. You will need a substantial amount of cash to develop vacant land. 

Related: Engineer Scale vs. Architectural Scale

Financial Considerations and Potential Risks

While buying vacant land comes with plenty of upsides, it’s not without its challenges. Going into a land purchase with a clear understanding of the potential financial hurdles is the best way to protect your investment. Just like any major purchase, knowing the pros and cons helps you make a smart decision. Before you sign on the dotted line, let’s walk through some of the key risks and costs you should be prepared for. This isn't meant to scare you off, but to make sure you're fully equipped for the journey ahead.

Land Value Can Fluctuate

It’s a common belief that land is a foolproof investment that only goes up in value. While it's true that land is a finite resource, its value can certainly fluctuate. Market dynamics, changes in local zoning laws, or even new developments nearby can cause the value of your property to dip. For example, a new highway built too close could decrease its appeal, while a new shopping center could send its value soaring. It’s important to research the area thoroughly and understand the long-term development plans to get a better sense of which way the value might trend.

Securing a Loan is Often More Difficult

If you’re not paying with cash, be prepared for a more involved financing process. Traditional lenders often view vacant land as a speculative investment, making it a higher risk than a property with an existing home. Because of this, you’ll likely face stricter requirements. Banks may ask for a larger down payment—sometimes as much as 20% to 50%—and you might see higher interest rates compared to a conventional mortgage. You'll probably need to apply for a special "lot loan" or "land loan," which has its own unique set of qualifications and terms you'll need to meet.

Anticipating Utility and Development Costs

A piece of raw land is a blank canvas, but preparing it for construction can be expensive and time-consuming. You'll need to account for the cost of connecting to public utilities like water, sewer, and electricity. If those aren't available, you’ll have to budget for installing a well and septic system. Don't forget other expenses like clearing trees, grading the land, and creating an access road. Each of these steps requires permits, which often call for a detailed site plan showing property lines, existing features, and proposed changes. Planning these additional services and costs upfront will save you from major surprises down the road.

Vacant Land is a Long-Term Investment

Buying land is typically a long game. Unlike flipping a house, it’s not an investment that usually provides a quick return. It can take years for the property's value to appreciate enough for a profitable resale, or for you to save up the funds needed for construction. During that time, you'll still be responsible for carrying costs like property taxes and basic maintenance. It’s essential to have the financial stability to hold onto the land for the long haul without expecting it to generate immediate income. Patience is truly a virtue when it comes to investing in vacant land.

5 Important Things to Consider When Purchasing Vacant Land

Before you purchase vacant land you should take into consideration our five tips:

1. Have a Good Team

Surrounding oneself with a knowledgeable team of professionals can help to avoid costly mistakes. The costliest mistake would be acquiring a piece of land that is mismatched with the real estate need that one has in mind. 

Assess the Best Options

If one is looking to build a property, whether it’s a mix-use building, commercial, industrial or residential, engaging with architects and landscapers before making the buying decision is crucial. Their input will help the buyer weigh their building options and their professional advice on the piece of land will give the project direction. 

Identify Issues

Although it means extra fees for these experts, it’ll prove worth it because they can spot and sort out issues that may cost the owner down the line.

Engaging with such professionals will also help the owner know whether the vacant land is a match to the property he wants to build or not.

Have you considered creating a site plan for the property? My Site Plan can create a custom architecture site plans or floor plan for your vacant land development.

Identify Safety Risks

A team of professionals can recognize unforeseen risks and safety issues. For instance, if the land is at the edge of a right-angled cliff, an architect and landscaper may counsel against the purchase for safety reasons.

 At the same time, they’ll also present options that can ensure safety for such a site while adequately communicating the hefty financial implications involving such an undertaking. 

This may include the challenges of accessing utilities such as freshwater, roads, gas connections and electricity. With this information, the potential buyer can weigh the pros and cons of the site from an educated point and make the best decision possible based on his business needs.

Related: Residential and Commercial Site Plans

Hire the Right Professionals

When you're thinking about buying vacant land, it's tempting to go it alone, but assembling a team of professionals is one of the smartest first steps you can take. The biggest risk in buying land is ending up with a property that simply doesn't work for what you have in mind, a mistake that can be incredibly costly to undo. Bringing in experts like real estate agents who specialize in land, architects, and landscapers early in the process is crucial. They can help you perform due diligence and properly assess a property's potential before you commit. This team will be your guide to avoiding a costly mismatch and ensuring the land truly aligns with your long-term vision.

Each professional on your team offers a unique and invaluable perspective. An architect can look at a potential lot and help you understand the building possibilities, structural limitations, and how the natural features might influence your design. A landscaper can assess the topography, soil quality, and drainage, which are critical for foundation, septic systems, and outdoor living spaces. Their combined input gives your project clear direction and helps you weigh your options realistically. This is also the stage where drafting a site plan becomes essential, as it provides a clear visual blueprint of the property for your entire team to work from, ensuring everyone is on the same page from day one.

Yes, hiring a team adds professional fees to your upfront budget, but it’s better to see it as an investment, not just an expense. These experts are trained to spot potential issues an untrained eye would miss, like complex zoning restrictions, easement complications, or problems with utility access. Catching these things early can save you a fortune in unexpected costs and delays. Think of it as insurance against major headaches and financial setbacks. While you budget for your team, you can also plan for other essentials; our straightforward process and pricing for site plans, for example, makes it easy to factor in this key document without any surprises.

Beyond logistics and finances, your team plays a critical role in identifying unforeseen safety risks. A property might look perfect on the surface, but an experienced professional can spot red flags. For instance, an architect or landscaper might advise against a purchase due to unstable ground, a high water table that could lead to flooding, or other environmental hazards. They can also present creative and effective solutions for challenging sites, giving you a clear picture of the costs and work involved to make the property safe and buildable. This allows you to make a fully informed decision about the land's true potential and liabilities before you sign any papers.

2. Lay of the Land

When purchasing land, one should consider the topography of the site. It’s easier to build on flat land than it is to build a property on a hill.

By having a good idea of the topography of the land one wants to buy, the investor is able to tell whether it will be suitable for the kind of property they want to put up.

Topography Can Help or Hinder Depending on Property Type

For example, when considering building a hotel a surrounding topography of hills, mountains, lakes, and forest is not so bad as it contributes to panoramic views and offers the guests natural adventures activities such as hiking, kayaking, and skiing. 

Homes for sale, on the other hand, may not be best suited for such a topography because the location is far removed from the city, schools, and hospitals. Even the infrastructure elements like gas, water, and electricity are not easily accessible to the planner. 

Depending on the type of property one wants to set up, they have to consider if the vacant land's topography is conducive. Usually qualified architects and landscapers will advise appropriately on such technical matters.

Related: Tree removal in my area

Check for Water Risks and Flood Zones

Before you fall in love with a piece of land, you need to investigate its relationship with water. It’s a critical step that many buyers miss, and it can completely alter your building plans and budget. You’ll want to check if the property is located in a floodway, flood zone, or contains wetlands. A floodway is generally not a suitable place to build, and while you can often build in a flood zone, it comes with specific construction requirements and will definitely impact your insurance costs. Understanding these designations is essential because they come with local and federal regulations that dictate what, where, and how you can build on the property.

You can start your research by visiting the FEMA Flood Map Service Center online or by contacting the local county planning and zoning department. They can provide detailed information about any water-related risks associated with the parcel. Finding this out early in the process saves you from unexpected complications and expenses. This due diligence is a fundamental part of the pre-construction phase, ensuring your project is viable before you invest further. Knowing these environmental constraints helps you and your team create a solid plan for development, which is a necessary step before creating the site plans for your permit application.

3. Zoning

The local planning and zoning department can be very helpful in finding out what type of properties can be built in various zones. This can range from commercial properties, mix-use properties as well as exclusively residential properties.

 So, if a developer is interested in purchasing a parcel of land for the purpose of building a commercial building such as a high rise office or warehouses, then they must make sure that the land on offer is in the appropriate zone. 

Communicate With the Planning and Zoning Department

This isn’t complicated to find out as a phone call to the planning and zoning department will explain what property can be built on the zone the land is under.

Some investors buy vacant land in areas where the zoning is expected to change after some years. This is in anticipation that once the zone changes it will work to their favor in value appreciation.

While it may be a sound strategy, one can never tell when a zone change will happen. It might happen after one's lifetime meaning the appreciation of the land may be felt by future generations. 

Related: Where to get a house site plan?

Confirm Legal Access and Road Maintenance

It’s one thing to see a road leading to your potential property, but it’s another to confirm you have the legal right to use it. Don't assume that a visible path guarantees access. The property needs a legally recorded easement or right-of-way if the access road crosses another person's land. Without it, you could find yourself in a difficult situation with a landlocked property. Beyond just access, you also need to find out who is responsible for road maintenance. A quiet country road might be charming, but if it's privately maintained, you and your neighbors could be on the hook for expensive repairs, especially after rough weather.

Review Future County Plans

The peaceful, undeveloped land surrounding your dream plot might not stay that way forever. Before you buy, take a trip to the county planning office or check their website for the long-term comprehensive plan. This document outlines future development goals for the area. It can show you if a new highway is planned nearby, if the adjacent farmland is zoned for a future subdivision, or if there are plans for commercial buildings. Knowing what the county has in store can prevent unpleasant surprises, like discovering a waste management facility is scheduled to be built a mile down the road, and helps you invest with confidence.

4. Building Setbacks

Building setbacks are requirements set by planning and zoning departments for the purpose of giving buildings in a given area consistency and order.  A setback determines the space between the lot line and the building. 

Most people looking to purchase land may not be aware of such a requirement when building which is why engaging the help of a professional in-home design and landscaping is vital. It can help the investor reconsider their purchasing decision. 

By consulting a professional, it quickly becomes clear that one has to know the dimensions of the property they aim to build.

Setbacks Can Determine Property Viability

This information about the building setbacks will directly determine whether the size of the land they are about to purchase will be enough for the property or not. 

Often, vacant land buyers have made the mistake of buying a piece of land without important due diligence on the land vis-à-vis their property plans. The typical result is finding out that after building setbacks, the property they would like to build is too big for the piece of land they bought. 

To avoid such disappointments, it's best to team up with a professional in local vacant land purchases as well as building requirements in the area. 

Related: Best Patio Plants

Visualizing Your Project with a Site Plan

A site plan is your project's first blueprint, translating your ideas from a concept into a visual layout. It shows exactly how your proposed building, driveway, or landscaping will fit on the vacant lot, letting you see the real-world impact of building setbacks and topography before you commit to a purchase. This is the key to having productive conversations with your architect and contractor, helping everyone determine if the land is a good match for your vision. A custom site plan helps you avoid the costly mistake of discovering your dream home is too large for the property after factoring in all the local requirements. Getting this essential document is straightforward and can be done entirely online, giving you a clear picture to move forward with confidence.

5. Annual taxes

Annual tax obligations on a property are a factor to be considered even before the purchase of vacant land.

The acceptable annual tax obligation on a property is from 1-4% per annum of the total value of the property. If the annual tax is above the mentioned rates, then one has to reflect on the viability of the purchase.

Related: What is a site plan?

Is It Better Buy Land or a House?

When it comes to real estate, people constantly battle with the tough choice of either buying land to build a property on or just buying the property outright. Everyone’s situation is different, which will be reflected in whatever choice they make. 

We’ve already mentioned some benefits of buying land, so now we’ll look at some benefits of buying a house outright.

Move-In Right Away

When you’re buying land to build a house on, you’re usually be waiting about six to seven months before you can move in. No one wants to wait that long before moving into their dream home.

When you buy a house that’s already built, there’s no waiting period. After your loan gets approved, all you need to do is find a home, and then you can move in when you want to.

Easier to Negotiate

Are you a good haggler? If so, then you’re in luck. You may be able to negotiate your final buying price depending on who you’re working with.

If you’re buying land, there’s little to no wiggle room since builders take labor into consideration before giving you the final price.

Limited Stress

Buying a house can be stressful because you need to figure out:

Where you want to liveYour budgetNeighborhood to raise your familyMoving costs

However, when you’re buying land and building on it, you need to worry about those costs plus the interior and exterior design plans of your home, which includes:

FlooringCabinetsPaint schemesWiring

Also, remember that you need to take care of all of these tasks while staying within your budget. So if you want less headache, it may be easier to focus on buying a house instead of the land. But if you’re up for the challenge, purchase the land.

Look for Potential Tax Breaks

Don't overlook one of the biggest financial perks of buying vacant land: the potential for tax benefits. For starters, property taxes on undeveloped land are usually much lower than on lots with existing homes or commercial buildings. This means lower holding costs for you while you finalize your building plans or wait for the right market conditions. On top of the generally lower rates, some areas offer specific tax incentives if you use the land for something like farming or conservation. It's always a good idea to check with the local tax assessor’s office to see what programs might apply to your specific parcel. As a general guideline, an acceptable annual tax bill is about 1-4% of the property's total value. If the taxes are higher than that, you'll want to take a second look to make sure the purchase still aligns with your financial goals.

Final Thoughts 

Vacant land has many benefits but also numerous caveats. Vacant land is always a safe, appreciable investment when you do the research and due diligence to determine the property’s value and potential.

Since one already knows the kind of property they would like to build, it can’t be overstated how important it is to seek the counsel of professionals before making a purchase. That ensures that the property one buys is matched with the property they want to build. 

Once the land has been purchased successfully, hiring professional site plan designers to design a home and build is a logical next step with no unnecessary hassle because everything has been taken care of by the professionals. 

My Site Plan has experienced CAD designers who can create a non-certified site plan for a new architecture projects. After gathering the required information, My Site Plan can create a site plan within 24 hours for most projects.

Looking to build on your property? Check out architecture site plans by My Site Plan!

How Can You Make Money With Land?

Profiting from your vacant land sounds like a dream. Some buy vacant land for a variety of reasons -- to build on it one day, sell when it appreciates, or lease it. Land is one of the best investments in the world as it is impossible to create more. 

Many people find a way to make money with their vacant land that, in some cases, turned out to be a better use for it than building. This may sound too good to be true, but vacant land can lend itself to many profitable uses. This guide will explain how many are making an amazing extra or even primary source of income from their land!

Related: How To Develop Land: A Simple Guide

Is Vacant Land Worth Investing In? 

Some see vacant land as a space that isn't used to its full potential. Most don't know that even without building on a piece of land, it can be a worthwhile investment that will usually appreciate while having the ability to provide unique streams of income. 

Vacant land can also provide you with tax benefits. You can write off property taxes on your Schedule E form (from 1040). This can offset some of the profit you will be able to make on other real estates you may own. 

How Do You Buy It? 

Buying a great piece of vacant land will take some investigating into a few things. Make sure you know everything when it comes to zoning, land use restrictions, and take a look at some common mistakes when buying land. 

Compare properties carefully so you can get the best plot for your money. Do your due diligence and enlist the help of an expert agent to help you with the buying process. 

You can browse these sites to take a look at vacant land offerings in your area!

Buying Land from the Government

Another avenue for purchasing vacant land that many people overlook is buying directly from the government. Federal, state, and even local governments occasionally sell parcels of land that are no longer needed for public purposes. While it’s not as common as buying from a private seller, it can be a great way to find unique properties. The process is a bit different from a standard real estate transaction, but with a little research, you can find some excellent opportunities.

Understanding Surplus Land

When a government entity determines it no longer needs a piece of property for public use—like a park, conservation area, or administrative site—it may declare it "surplus land." This is the only type of government-owned land available for public purchase. For example, the state of Florida owns millions of acres, but only a tiny fraction is ever considered surplus and put up for sale. It’s important to understand that you won’t be buying a slice of a national park; instead, you’re looking at properties that have been deemed excess to the government's needs and can be returned to private ownership.

The Government Purchase Process

The process for buying government land is typically more structured than a private sale. Before a property is offered to the public, it's usually made available to other government agencies first. If no other public entity claims it, the land can then be sold to private individuals or groups, often through a bidding process or a formal offer system. A key benefit for local communities is that once this land is in private hands, it gets added to the county tax rolls, generating revenue. After you acquire a parcel, you'll still need to follow all local building and zoning regulations, which usually begins with getting a site plan for your permit applications.

How to Find Government Land for Sale

Finding these properties requires a bit of proactive searching. The best place to start is directly on government websites. For federal properties, the U.S. General Services Administration (GSA) is a primary resource. For state-owned land, you’ll need to check the website for your state’s specific agency, often the Department of Environmental Protection or a similar land management office. Look for sections labeled "Surplus Properties for Sale" or "Surplus Property for Bid." Many of these agencies also offer email newsletters or notification lists you can subscribe to, which is the easiest way to stay informed about new listings as they become available.

The 10 Best Ways To Make Money With Your Vacant Land 

Event and Campground Space

Camping has been booming in the last few years as families have been seeking the outdoors for a peaceful respite from their day to day. People wanting a break from civilization has driven an exploding outdoor recreation scene that you can benefit from by renting campsites out nightly. 

You will need to follow all regulations in your areas and make sure that your land is available for this use. But once you make it through the paperwork and bureaucracy, you will have an extremely lucrative business on your hands!

The market for outdoor event space is also better than ever. If your property is particularly scenic, providing a wedding for venues can make you a killing. Many have grown their incomes by a huge margin with wedding venues, and so can you. 

Leasing to Solar Companies

If you have a larger vacant plot in a sunny area, you may be in luck. Solar energy is another exploding industry in the US that has companies looking for more space to set up solar panels. You can seek out solar or utility companies in your area to see if they might be interested in producing solar power on your property. This is a long term investment as it can take up to 5 years to finish, but one that can pay big dividends. 

Stable Land

Are there a lot of horse owners in your area? Vacant lots offer the perfect opportunity to provide a horse stable. Many people don't have sufficient land to keep their horses, so they stay on other property. Consider making your land available for horse riding as well. 

Recreational Vehicle Storage

Like horses, many people don't have the best places to store their RVs on their property. Across the country, RV storage facilities provide a booming business to those with large lots. You will need to provide a secure area for RV storage and be available to allow owners access, which can provide a challenge. However, depending on what you charge for storage fees and how many RVs you store, you can face a huge monthly income.

Related: What is the Cost of a Land Survey

Want the best plans to build on your property? Contact My Site Plan to get the plans you need to obtain a permit.

Timber Use

If you own a large area with plenty of timber, then leasing your land to a commercial logging or timber company could be the way to go. These companies will pay large sums to harvest your land for the hot commodity of wood. Don't have quite enough trees to sacrifice? Opening your land to a smaller firewood company or selling wood yourself can be a perfect option. 

Boat Storage 

If your land is near a lake or the ocean, offering boat storage could be the perfect business. When your property is on the water, you are perfectly situated to open a marina, dry boat storage, or both! This also comes with the high maintenance of providing a secure space while allowing owners to take boats out when they please, so as with other storages, you may need to consider hiring an employee.

Leasing Your Property to Cell Companies 

Cell tower companies need more space than ever to expand our mobile service capabilities with 5G and beyond. Reaching out to local cell providers could be an excellent way to gain a large source of income, especially in highly rural areas with one or two providers. 

Leasing to Farmers

Leasing your land for farmers to grow their crops on is a tried and true model of income for land that would otherwise sit empty. Farming can be hard on land, so ensure that you know about the pros and cons of opening up your property to crop growing. 

Provide a Seasonal Destination 

Pumpkin patches and Christmas tree farms could be the perfect use for your vacant land and can be highly profitable. Turning your land into a destination a few times per year can be a great way to invite vendors and fun. 

Raising Livestock 

Raising cows, chickens, pigs, or any other livestock on your property that belong to yourself or someone else can be a highly profitable venture that is sure to provide a large monthly income. 

Looking for the best site plans to develop your land? My Site Plan can draw the highest quality plans from sketches of your dream home within 24 hours! 

There are a variety of ways to profit from your vacant land that we haven't listed here, but this should get your creative juices flowing for how to maximize your investment. 

Although it may seem like it isn't reaching its full potential without developing your land, you can make money while waiting to sell the land or build your house!

Related: 10 Best Backyard Workspaces

Key Takeaways

• Build your team before you build your project: Work with professionals early to investigate critical factors like zoning laws, topography, and building setbacks. This helps prevent costly mistakes and ensures the land truly works for your vision.
• Look beyond the purchase price: Remember to budget for more than just the land itself. Factor in development costs like utility hookups, land clearing, and annual property taxes, and be prepared for a stricter loan process.
• Think long-term and get creative: Vacant land is a patient investment that appreciates over time. While you wait to build or sell, you can generate income by leasing your property for anything from RV storage to seasonal events.

Related Articles

• The Do's and Don'ts of Buying Vacant Land
• How To Develop Land: A Guide
• Land Survey Cost: Prices by Type, Size & Tips