Published on Wednesday, June 20, 2018 by Land Century
Vacant land can become an income producing asset. Land is valuable, and while land may be most valuable when a structure is built on it, this doesn't mean it can start producing income for you now.
We're going to explore a few business ideas for vacant land that owners can implement to make money off of their property.
How to Earn Money from Vacant Land
Vacant land can help you start earning money in several ways. Of course, I don't know the type of land that you own, so it's difficult to say exactly what you can do with your land. But I do know the many ways that people are creating income producing assets from their land.
How to Make Money Buying Land Using These 7 Ideas
You can make money buying land in a few ways:
- Sell the land. You can hold on to the land and sell it in the future. This is a return on investment that can be very high, but you need to understand how land in your area appreciates. Land can also be cleared, leveled and prepared for building, which will push the price of the land up drastically.
- Boat storage. A simple way to make money off of your land is to allow others to use it for storage. Boats are a very popular storage option because owners will leave the boat on your property all winter long, and come warmer weather, they'll take their boats to the water. Storing a house boat can cost $125+ per month at some storage places.
- Foresting the timber. Your land's timber is valuable. A lot of owners will plant trees, hold on to the land and sell the timber when it can be harvested. You can also use the trees for your own firewood business, selling the wood off during the colder season. When used as a source of timber, the type of tree will dictate how long it takes for the tree to mature. Maturity can be 7 years or 50 years – it all depends on the wood type.
- RV storage. RV owners often don't have the space to keep their "toys" on their own property. Storage facilities are filled with RVs, and all it takes is a little vacant land to be able to store an RV. Of course, you'll need to allow access to the land, but this shouldn't be hard with a bit of clearing. Storage fees can be $50 a month or $400 a month. Typically, indoor storage is the most desirable, but if you can fit 10 RVs on the property at $50 each a month, you'll have $500 in easy income.
- Campground. The rise of big cities has led many people to camp when going on vacation. A nice, peaceful time away from civilization is all that a lot of people need to feel grounded. The great news for a lot of people is that there are campground options everywhere. And as a land owner, people will pay to simply camp on your land. I was recently looking at a campground, on a person's own private property that wasn't utilized. The price was $20 or $25 a night, and you could easily fit 10+ camps on the land, or $200 - $250 in potential camping fees a night. You'll want to find out how much insurance would cost for this type of business venture.
- Solar energy. If you have the money to install solar panels or want to rent the land out to a company that wants to install solar panels on your land, this can be a very lucrative option for you. The goal is to work with energy providers or companies that want to purchase the solar energy you produce. A lot of small businesses are popping up that are creating their own solar farms and selling the energy back to electric companies. You can work with these businesses, or pay for the upfront costs yourself. (Related read: What Type of Land Do You Need for Solar and Wind Energy Solutions)
- Horse stables. Horse stables are booming. People want to own horses, but few have the land to accommodate these beautiful creatures. You can have your own horse stables, or you can even allow just riding on your land. A lot of owners will install their own barn for the horses, and they'll demand $400+ per month in some cases. You will find these prices are even higher in metropolitan areas. You need to do your research in your area, but if you have a couple acres of land, build a stable and clear a space for riding, you can demand top dollar.
What to Use Vacant Land For
We've already discussed a few ways that you can use your vacant land:
- Boat and RV storage
But there are other options available, too. You can choose to use your truly vacant land for any of the following:
- Junk yard. I know this isn't a business everyone would entertain, but a junk yard is an easy way to make money. Unwanted items are brought to you, you store the items on the land, and then sell the items for scrap. This can become a full-time business, but this is a hands-on way to use vacant land that many owners pass up because they have too many commitments.
- Hunting. A lack of large parcels of land has caused hunters to rent private land for their hunting needs. The great part is that you don't have to do anything besides give the hunters the right to hunt on your land. A hunting property is easy income, and hunters will pay several hundred dollars during prime hunting season. See latest hunting land listings here.
- Billboards. If your land is located near a high traffic area, you can also place a billboard on your property and rent it out. Businesses will pay good money every month to rent the space. Costs for four weeks of advertising are $1,800 in Spokane, Washington based off of 1.7 million weekly potential impressions. The same sized billboard in New York, New York would cost $14,000 every four weeks, with 8 million potential weekly impressions.
- Parking lot. Prime land in a hot spot can earn you money off of parking fees alone. A popular lake near me has very little parking, so land owners will charge a minimal fee to allow people to park on their land. Dirt and grassy areas are common, and the lot isn't a high-maintenance venture.
These are just a few of the very easy methods of using your vacant land to turn a profit. Since there are little-to-no costs in upkeep for these ventures, they're a great option for most land owners to pursue.
Renting Vacant Land
Renting out vacant land has been a practice that’s been in use for centuries. Land has always been a valuable asset, and renting the land out offers ample opportunities to make money. You can rent vacant land in one of two ways:
- Develop the land.
- Rent the vacant, raw land.
I'm going to be discussing renting the raw land, but in the next section, you'll find options for renting the developed land. Renting vacant land can be done in a variety of ways:
- Event rentals. A popular option, especially for large parcels of land, is to rent out the space for events. Wedding venues have been doing this around me, and all they offer is the land. You can rent tents, tables and chairs, or you can bring your own. A farm near me does the same, and they'll make a few thousand dollars for one wedding event.
- Farm leasing. If you have a decent amount of land, farmers will also want to use your land for farming. These farmers will take care of all the upkeep and work, but they need your land to make money. You can sign multi-year agreements and have a secure source of income for years to come.
- Grazing land. Farmers may not want to plant and grow their crops on your land. Instead, some farmers or ranchers will prefer to use the land for grazing. This allows you to have free "maintenance," as the animals will eat the grass. Grazing land doesn't produce the same income as the former options, but you literally have no upkeep involved. making it all profit.
- Energy. Utility companies may offer to pay for solar panels on your land, and they may also be willing to pay for wind turbines. The idea is that you'll be paid a monthly fee or commission on the energy produced. You can also request that you receive free energy from the deal, lowering your monthly electricity costs.
- Minerals. Land may have valuable minerals on it, and if it does, you can be paid a lot of money to rent the land. Oil companies often lease land and give the owner of the land royalties on the oil drilled. You may have struck "gold" if your land has valuable minerals, but there's always the possibility that your land does have valuable resources on it.
And don't forget: you can rent out the land to campers if you want, too. There are ample opportunities to rent out your land. You might even be able to find renters willing to pay to hike on your land or use it for sporting, such as off-roading.
Buying Land for Development
If you're going to buy land for development, you'll need to know a few things:
- What is the land zoned for?
- Will you need to build a road?
- Will you need to install a septic and well?
- Will you need to hook up utilities?
Every lot is different. You'll also have the option of using your equity in the land to pay the down payment on a construction loan. There's a lot that goes into the development process, and lenders want to ensure that they have as little risk as possible when lending money.
Putting the land up as equity, when it's owned, allows you to avoid having to pay cash for your down payment. Some lenders may require a cash investment, but this varies from one lender to the next.
You can choose to develop the land into anything that you choose:
- Housing development. A lot of owners have or plan to build homes on their vacant land. The goal is to build a home, and then turn around and sell the home for a profit. This is a great option because it allows you to also have a lot of options if the house doesn't sell quickly. You can even rent out the home if it doesn't sell, or rent it out as an Airbnb property while trying to sell the home.
- Commercial units. Strip malls and commercial units will be a great source of income because commercial units have much higher rent prices than residential units.
- Rental units. Why not develop the land and rent out the units? This is a very high return on investment because the units will pay for themselves and produce extra income. It's a great option in tourist areas, too, where people come to rent during peak season.
- Parks. Some owners will turn their land into a private park or club, and others will turn their land into an RV or trailer park. The latter does come with a large upfront cost, but you'll be renting out your park with monthly income guaranteed from renters. You can then take these funds and flip them into a new property to build up your real estate portfolio.
- Storage facilities. Storage units bring in a lot of income, and all you need to do is provide the structure. These units can rent for hundreds of dollars a month, depending on size. And the cost to build the storage unit is much lower than building a home or commercial unit.
Developing land is a costly venture, but it's an option that some owners do entertain. If you have the funds to develop the land, you'll reap the highest return on investment.