When it comes to land tax sale auctions, many people often focus on residential properties, overlooking the significant potential that lies in land parcels. Surprisingly, between 20% to 25% of all auction lists comprise land of various types.
Stepping into the world of land tax sales doesn’t have to be daunting, but understanding the nuances of land parcels is crucial to unlocking this hidden gem in the real estate industry and making wise investment decisions. So let’s talk about the best place for a beginner to get started investing at land tax sales.
Key Takeaways
- Land tax sale auctions offer significant potential for buying land below market value.
- Vacant residential lots in subdivisions are an excellent land investment for beginners.
- Engaging with a professional land broker is essential for success in this arena.
- Understanding relevant factors like land surveys, access to water, and ingress/egress can lead to smart investments.
Purchasing Residential Vacant Lots at Land Tax Sale Auctions
Discovering Undervalued Properties
At tax auctions, it’s common to find land parcels being auctioned off at significantly lower prices than their actual market value, often for pennies on the dollar. As a beginner, you’re encouraged to focus on residential vacant land within subdivisions, as their prices are easier to determine. Often, other investors and bidders overlook these parcels, allowing you the potential to pick up great investment opportunities.
Estimating Land Values
When assessing the value of a land parcel within a subdivision, a simple guideline is considering that the land value typically ranges from 10% to 20% of the neighborhood’s house values. For example, if a house is worth $400,000, the land value should be between $40,000 and $80,000.
Advantages of Residential Lot Investments
Investing in residential lots provides numerous benefits compared to other types of real estate, such as:
- Lower initial investment
- Lower competition in auctions
- Often easier to buy at a fraction of market value
Various Land Types Sold at Tax Auctions
A variety of types of land is sold at land tax sales, and different types of land may have different potential uses and values.
For example, agricultural land in East Texas can be worth $30,000 per acre, while infertile land in West Texas may only be worth $200 per acre. Therefore, it’s crucial to understand the differences between land types to make well-informed investment decisions.
The Role of a Land Broker
When venturing into land investments, it is essential to involve a knowledgeable land broker, not just a regular real estate broker. Land brokers understand factors like soil types, water sources, accessibility, and other characteristics specific to land investments. They can guide you through the process and help you make the best decision on which land parcels to target and help you avoid the common pitfalls of land investments.
A land broker can help you with challenges such as:
- Determining the exact boundaries of the land via a land survey
- Ensuring access to roads, ingress, and egress
- Evaluating the availability of water and utility sources
By understanding these aspects of land tax sale auctions and working with experienced professionals, you can tap into the overlooked potential of investing in residential lots within subdivisions to secure profitable deals.
Uncovering the Hidden Potential of Land Auctions
As someone who is knowledgeable about real estate, it’s time for you to explore this little known, yet highly profitable niche: land tax sale auctions. Many people tend to focus on residential properties, leaving this area largely untapped, making it a potentially lucrative opportunity for those willing to put in the effort.
Why Land Auctions?
Since most people typically focus on bidding for houses, competition for land is significantly reduced. By concentrating on vacant residential lots in subdivisions, you’ll face less competition while knowing the value of these lots and can take advantage of the value added by existing infrastructure like water, sewage, and electrical systems
Conclusion
Land auctions present a unique, underserved market that offers significant potential for profit. By learning how to properly evaluate land, you can buy properties at land tax sales at substantially discounted rates – even as low as 6 to 8 cents on the dollar. But, understanding the nuances of land valuation isn’t something that can be mastered overnight.
By working with a land broker, being strategic with your bidding, and understanding the nuances of land valuation, you can find golden opportunities in this niche area. So why not seize the day and leverage your real estate prowess to benefit from this untapped market?
If you’d like to know more about tax delinquent property investing, Ted Thomas provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops, web classes, personal coaching with certified coaches, and an interactive map and auction calendar research tool that allows you to visit each county online to find the details about upcoming auctions.
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