Most aspiring real estate investors often have a lot of questions especially about how to invest in vacant residential plots.

Vacant residential plots are pieces of land that have been developed specifically for people who are intending to build their houses in those areas.

So how do you go about this when you are just starting out? In this article, I will walk you through the most essential factors that you must consider for maximum returns from your investments.

  1. Location of the land

Location is one of the most crucial factors in our list that you need to be concerned with before you put any offer to purchase any piece of land or before you put yourself into any debt.

Any real estate property located in the best street or a fast developing suburb will tend to be attractive to tenants. This will in turn contribute to a high occupancy rate in your property.

Even when you approach a financial institution to finance your property, they usually visit to establish if it is in a strategic location and that they are guaranteed to have their funds if you default without a much-delayed process.

Besides being in a strategic location, you need to ensure that there are infrastructural developments within the area or there is potential development in the near future. This will not only impact your land value but also increase the occupancy rate.

If you buy a property with some houses to refurbish, that will be the best deal you will ever get. You will have to renovate and flip it and make your profit quickly.

  1. Wholesale properties

Do you buy a property at a premium price or when it is discounted? Just like in the stock market, you need to be looking at residential plots which have massive discounts. And you can get easily it when a real estate developer is launching the first project in the market.

Alternatively, you can look for distressed properties that have been in the market for a while and no one is willing to buy. Propose to buy many pieces and negotiate for a better discount then you develop and sell or rent out to tenants willing to come and live there.

  1. Understand tax benefits

Tax benefits are arguably the most incentive that you can get from your government as a real estate investor. The role of the government is to provide affordable housing to its citizens, however, due to its inability to do so, they encourage the private sector to provide housing by formulating tax benefits for property owners.

So you need to take time to understand laws in your jurisdictions that affect real estate development. Go for those properties that have the highest benefits in terms of taxation.

  1. Check your credit report

Finally, before making an offer on any piece of real estate property it is very important to check your credit days or months before looking for property.

In most scenarios, you will have some external funding which you can raise through loans. And before you are given a loan by any financial institution, your credit report has to be above average.

So ensure you have a better report by either reducing existing loans or if there is any technical error, get it fixed before making loan applications.

In conclusion, buying a residential plot needs that you consider location, buy when it is discounted, and ensure that you have ready financing before making the offer.