Has the idea to buy land ever crossed your mind as a way to make money? As a real estate investor I have found that land presents a wonderfully unique opportunity. It’s a great way to generate passive income with little to no effort. And now, I want to tell you all about it.
How to Buy Land to Make Money for Passive Income
A few years ago I found myself the new owner of a ½ acre piece of land in my local area. I did not know anything about the property, and I only ended up paying about $1500 overall for the property. After I had owned it about 6 months I finally did some digging to find out some of the tidbits about the property.
To my joyful surprise, I learned that I shared a driveway with my industrial-business neighbor. He is a neighbor who uses that driveway for heavy 18-wheelers every day. Do you see where I’m going with this?
Now, we share that driveway. It is mine and theirs. Which means that every time they drive up and down that driveway for their business that they are driving on my land, too.
So, guess what I did…
I marched up to the owner of the fortune 500 industrial company owner. And, I let them know that we had shared ownership of that driveway. Then, I told him that I would like to be paid rent monthly for their continued use of it. Surprise, surprise, he dismissed me (big mistake).
I encouraged him to go ahead and get his land surveyed and than call me. And then, I left it alone. Let it simmer….
What Kind of Land Can be Purchased?
There are four different types of land, though only three are considered “land.” If we were to draw a pyramid, agricultural land would be on the bottom, residential would be on top of that (up to 4 units in the property), then commercial, and finally industrial. Industrial land is often the most taxed, and leased regulated property type of the four.
The piece of property I purchased was zoned as industrial.
How to Find Industrial Land to Invest In
Go to the search engine of your choice and type in “real estate auctioneer near me,” “real estate auctions near me,” and/or “real estate auction in my city.” The first thing that is going to pop up is auction.com, which is the government’s third party provider of selling foreclosures via auction. But, don’t use this for your research.
Like I always say, you want to work with the little guy. You need to look for the ma and pa auctioneer, who works your local area. When you work with the “little guy” you will get far more of a reward for your time and effort. You will make great connections with your local community and have your name grow in your area. There are so many benefits from working with your local auctioneers.
Often, they will also have an email list that you can sign up for to receive weekly or monthly email updates for properties that they have coming up for auction. It keeps your pipeline moving so that you can increase your chances of finding solid deals in your honey hole.
This is how I obtained the property I mentioned.
This property had been sold at “absolute auction” by the previous owners, because they just didn’t want it any more. “Absolute auction” means that the property will absolutely be sold to the highest bidder on the day of auction. And, this is not always the case with other auction types. “Absolute auction” is definitely what you want.
I got my property because I put in my final offer one night before I went to bed, and by the next morning I learned I was the highest bidder. The total amount I bid was $1500, and the final amount paid after additional fees were added was $1586 and change. So, just shy of $1600.
Now, back to my property story…
What Happened When He Got His Land Surveyed?
About two weeks after I spoke with my fortune 500 neighbor, his secretary called me. The general gist of the phone call was, “We recently had our property surveyed and we have discovered that half of this driveway is yours and we would like to pay you rent every month for our use of it.”
So, of course, I feigned surprise, and asked how much they were looking to pay me for rent. “How does $250 a month sound?” Now, I knew it was a solid offer. But, my dad used to flip cars, my mom is a solid negotiator, and business just runs in the blood, so I knew not to take the first offer as it stands.
And, I said, “Okay, that’s fine, but I want you to take on the responsibility for all maintenance of the road. If there’s a pothole, or a tree falls, or anything like that, you take care of it.”
She was perfectly agreeable.
Me: “And, I want you to pay for my property taxes on the property every year, which is about $50 a year.”
Her: “Okay, that’s fine.”
And, then I hit them with my final word, the one that I knew was pushing it (or at least felt like I was pushing it by saying it): “The last thing I want is that I want you to pay me back rent since the time I bought the property six months ago.”
Ladies, a few weeks later she sent me a check for $1500!
So, once all was said and done I owed nothing on the property (owned free and clear). And now I make $250 a month because they use the shared driveway for their commercial business.
I know that might not sound like a lot of money, but it is enough to teach a valuable lesson: you CAN do this. You can be a real estate investor, take on even fortune 500 businessmen, and win. For me, this symbolized a whole lot more than merely $250 each month. It was the confirmation I needed to show me that yes, I could indeed do this investor thing. And so can you!
It also did not take me a long time to compound that income.
A friend of mine knew a guy who has big trucks that are used for hauling and dumping things, but when the truck is not in use it needs a place to stay. Now he houses his truck on my land, while paying me $500 every month for storage! That’s an additional $9000 a year doing nothing, owing nothing, and paying no taxes on the land.
Ready to Be All In?
If you are truly ready to change your life and your income, and you’re ready to do the work to make your financial situation better, you have to check out my First Deal Done Fast course. I created this course for the new real estate investor; the people who don’t know anything about investing and just want to get started.
It is packed with step-by-step guides and the process to become an awesome real estate investor in your neck of the woods. You will also connect with other investors who are all getting started and learning how to do this thing. If you are ready to get started and want to learn more, check out all the details here.
You CAN do this, too.
I hope that you can see how simple this process really is. You can get started right now and become a successful real estate investor! It takes a little thought, intention, and GRIT to get it done, but if you are serious about making changes with real estate, then the sky’s the limit for you. I hope you will join me to teach you the ropes, but no matter what I wish you the best success! And, be sure to tell me all about your adventures in real estate.