Sunday, May 29, 2011

Drawbacks and Benefits Associated with Raw Land

There are several drawbacks and benefits attached to raw land. You should consider all of them before you decide to buy or sell your raw land.
Let’s look at the few drawbacks of raw land:
• Cash flows are negative – because it cannot generate any regular income but you have to pay interest, principle, taxes, and cost of development.
• Land can be amortized not depreciated so tax advantages will be scanty.
• It is considered as an ill liquid investment in the long run, it takes time to get gains from raw land.
• You can face risk of loss on the resale of your raw land if you choose poorly or fail to negotiate and evaluate properly.
• It is not easy to borrow against accrued equity or acquire traditional financing on raw land.
Potential benefits
Here is the list of benefits associated with raw land:
• Pride and privacy of ownership provides a secure feeling to the owner.
• Owner financing can be acquired with the seller at lower market rates.
• If a buyer can achieve better and higher growth, it can give potential to tremendous appreciation.
• Subdividing can provide and add value for quick returns.
These are the potential benefits and drawbacks attached to buying and selling raw land. Whether you want to buy or sell your land you must consider the associated benefits and drawbacks with the process. If you want to sell your raw land for any personal reasons such as, unemployment, loan payment, lost retirement funds, need of money, medical expenses; it is good to consider this selling your land to a private buyer who offers fast cash and no hassle closings. You also need to decide between higher cash and fast selling. Sometimes, if you want higher cash you may have to wait for a good offer. However, Lucas Properties LLC can give you a great cash offer for raw land and immediate cash!

No comments:

Post a Comment