The Future of Vacant Land in Florida Is Hot
Entering a new year feels like a much-needed fresh start, and finding a new niche market to enter can rejuvenate your career while expanding your real estate business. There are a variety of niches from which to choose, but why not start from the ground up?
Florida is not often viewed as a state rich in vacant land, but there are approximately 500,015 acres of undeveloped land for sale in the state with a projected land parcel value of over $21 billion. Clearly, the potential value for vacant land in the Sunshine State is bright.
With Florida’s recent population increase, the need for food and biofuels has increased as well. As a result, agriculture will continue to boom; the value of farmland has increased by nearly100% since 2003. Biofuels are a significant factor in the rise of farmland value in the state, which accounts for 23% of the U.S.’s corn exports. According to the Florida Energy Systems Consortium, the potential output from corn is upwards of 8 billion gallons of ethanol per year, making now a great time to hop into this real estate niche.
The average price per acre in Florida is $28,961, which is one of the most expensive costs per acre in the country. The higher price per acre can be attributed to demand for vacant land and the rising value of farmland in the state. That being said, when you consider the value of land and its potential for growth, this investment could easily pay off in time.
Whether you'd rather invest in land yourself or you're simply looking to help your client find a plot to call their own, read on to discover some tips from a bonafide real estate investor.
How Brent Bowers of Zech Buys Houses LLC Created Passive Income Through Vacant Land
Brent Bowers is an expert when it comes to investing in vacant land in Florida. He is the CEO of Zech Buys Houses LLC, a coach specializing in land investing at The Land Sharks, and the host of the podcast Wholesaling Inc. In an interview with The CE Shop, Bowers shared his insights into buying and selling vacant land in Florida, along with the potential this niche market holds for creating passive income.
Having experience in buying residential real estate, Bowers eventually made the leap into investing in vacant land. After his first deal, he experienced an “aha” moment that told him selling and buying land was his ticket to success.
“I got my money out of the deal first with the down payment that my buyer gave me, and I had $400 a month. It was covering my car payment and something told me — it's like, ‘Wait a minute. This has gotta be too good to be true.’ So I kept doing it. I wholesale one [parcel of land], I flipped another one. 10 months into it, I was making almost $8,000 a month on monthly payments from land deals.”
One reason why he made the leap was the inherent differences between residential real estate and vacant land deals.
“Well, something always breaks [in residential real estate]. You know, the roof leaks, the septic tank goes out and it needs to be painted, you name it,” he said.
Even so, Bowers still invests in residential and commercial properties. He uses one asset (vacant land) to invest in another asset (properties).
“[Land] is always gaining appreciation. So I took one cash-flowing asset and bought another cash-flowing asset. I didn't stop [buying properties] because here's the cool thing; real estate goes hand in hand [with land acquisition]. What does all real estate sit on? Land.”
When seeking out new projects in which to invest, Bowers's approach is simple. It’s all about the numbers and finding the right discount that will allow him to reduce his risk.
“I really base it on the numbers. I want to get a massive discount as much as possible so there's room for me to sell it. You know, even if I don't get a rate, I want 3X my money, [though] I didn't come up with that [idea]. You know, Warren Buffet uses it. He talks about the margin of safety. You get [your investment] at such a discount where you, you know, there's hardly any risk to it.”
In the video below, Bowers outlines the benefits of investing in land, particularly in a state like Florida where growth is expected for years to come. Purchasing land offers investors a leverage point that will gain value as is but can eventually turn into developed land for residential or commercial properties.
As Floridians seek to escape the problems facing residents in cities and urban areas, the price per acre for land and demand will continue to rise. If you’re interested in entering this niche market, our tips can help you get started.
Pick a Market You Know (or Are Willing to Learn!)
Location, location, location remains a tried-and-true principle within the real estate industry, and in a niche market like vacant land, it’s more crucial than ever before. In our interview with Bowers, he explained the reasoning behind where he decides to do business and how that makes his deals easier to facilitate.
“I like to be on the outskirts of growth, you know, where growth is happening just on the outskirts because that's where the deals are to be found still. I generally like to stick within about a two-hour radius, which gives me the ability to go put out signs if I need [and allows me] to meet the buyer, meet the seller. There's a lot of land within a two-hour radius of your own backyard.”
Having the ability to meet with clients is crucial, especially when dealing with vacant land where large investments are common. That being said, defining your market can be difficult. To help narrow down your search, here were 2021’s top Florida counties in which to buy land:
- Lee County’s lowest price per acre: $10,700
- Charlotte County’s lowest price per acre: $20,900
- Collier County’s lowest price per acre: $13,500
- Citrus County’s lowest price per acre: $8,500
Note: The lowest prices per acre listed by county above were reported by LandWatch at the time our source’s article was written.
Understand Who Your Audience Is
Selling vacant land presents different challenges compared to selling a home. Typically, a homebuyer is looking for a property in a certain price range that meets their needs. However, when selling land, an agent must evaluate the buyer’s intended use of the lot to find the most suitable plot.
Creating a buyer profile is crucial to your success and ultimately the sale of vacant land. Strive to find answers to the following questions to help the process run smoothly:
- What is the property you are trying to sell?
- Is the land developed?
- Where is it located, and what are the environmental conditions?
- Would the ideal buyer want to build a new home here?
- Are they a developer looking to build a commercial property?
- Or are they looking to use the land for farming, raising animals, or recreational purposes?
- How does lending typically differ for raw land, unimproved land, and improved land?
Once you’ve identified who your ideal buyer is based on what the lot has to offer, create a marketing plan that caters to them and their intended use.
Dial-In Your Marketing Strategy
Now that you’ve defined your audience, you can spend your time and money on the channels that will generate the most leads for your business. Instead of trying every lead-generation tool, focus on four prospecting pillars based on your audience and location:
- Start by marketing your listings online to buyers looking for lots and vacant land. Most MLS sites feature already-built homes, but there are search filters to help interested buyers find vacant lots and land for sale.
- Beyond online leads, marketing your listings on social media with descriptions and hashtags tailored to developers, farmers, hunters, or entrepreneurs is a smart strategy to reach savvy buyers.
- Put some boots on the ground and place signs that tell the story of your listing and accurately depict the benefits it has to offer.
When selling a home, it doesn’t make sense to market your listing to someone in the neighborhood, but in the market of land sales and acquisitions, speaking with a neighboring property owner is a great strategy. They may want extra land as a buffer for privacy, or they may simply want to own more land for ranching, leasing, or development opportunities — so don’t be afraid to reach out!
Stay Connected and Keep Your Clients Informed
This tip may seem obvious, but real estate agents drop the ball all too often when it comes to staying connected with their clients. Adding a CRM into your arsenal of tools is a great way to keep your clients organized so you can better connect with them over time. Exchange contact information, then enter this information into your CRM and assure your client that you will reach out to them on a regular basis.
Outside of the occasional check-in, consider how to stay top of mind for your clients. Perhaps you could start a newsletter that keeps your client base up-to-date on local news and market shifts. If you have someone who is actively seeking land or a vacant lot, consider texting them on a weekly or as-needed basis to share links to new listings. You can even check in via text to gauge their interest without bogging down their voicemail. Just remember to balance being present with being annoying; no one likes to be bothered day-in and day-out. Establish communication expectations with each client, note their preferences in your CRM, and then reach out as agreed upon.
Beyond sending a text, calling, or emailing, being available is the key to keeping clients and eventually making a sale. The life of a real estate agent goes beyond the typical business hours, and for those veterans in the industry, you know client questions can pop up at all hours of the day.
Be prepared to answer questions at any time to show them your commitment and market insight, and you could be closing sizable vacant lot deals in no time. Best of luck!