General (main property discussion here) - Land

Hello everyone

I have a single buy-to-let in the West Country (sort of accidentally actually), but I am looking to invest some more money and further properties seemed logical.

While at a recent show someone suggested to me that I buy some land for development, and I was wondering if anyone here had done this and whether it worked out for them?

How much money do you think I would need to do this, and how would I go about approaching developers to use the land once I had bought this (someone said this would be taken care of actually, but I can't remeber how!)?

Thank you

Bryan

Hi Bryan

If you're talking about the land buying schemes I think you're talking about, it's actually quite a hands-off investment.

Companies that specialise in land investments look for suitable green field sites where future housing development is a possibility.

They then buy one of these sites and sell it off to individual investors as plots. Once all the plots have been sold, a management company is set up to gain planning permission and sell the whole site to a developer (the land is worth a lot more once planning permission is granted). The profits are then shared amongst the investors.

The return for the investor is dependent on the price of the land before planning permission, and the price after. The less promising sites to be developed will be cheaper, will take longer to gain permission/ find a developer, and hence will proveide a greater return if/ when the deal is pulled off.

All you have to do is research the likelihood of the site being developed, check to see if the return is fair to you, and stump up the cash. You'll get a vote to approve the management company I expect, but should be no need for involvement beyond that.

Will

Thank you Will

I am having second thoughts now! It waws good of you to explain it all though.

Thank you

Bryan

I view this land buying as a bit of a punt Bryan. You never know what to expect as a return, but there is an underlying asset (you could resell the plot to someone else), so you have some security.

I haven't bought any (yet).

Horses for courses mate!

John