How To Invest in Land: A Beginner’s Guide for 2025
Written by
Jacob Wade
Edited by
Melanie Grafil
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Buying land can be a good investment, but it’s not quite the same as investing in traditional real estate. While land offers more flexibility in the types of investments available — and often comes at a lower cost than a home — there is a much higher risk when you invest in land if you’re not well researched.
This article will go over how to invest in land for beginners, including a step-by-step framework, financial strategies and how to do your due diligence before investing.
How To Invest in Land and Make Money: 4 Strategies
Investing in land for profit can be done in many ways. Here are four strategies to consider to make money from investing in land:
Strategy 1: Buy and Hold
If you’re a long-term investor, you can make money by purchasing land and holding it for a long period of time. The goal is to purchase land in an up-and-coming area and hold in anticipation of earning money through price appreciation.
You can purchase residential, commercial or even potential farmland using this strategy. It’s important to research the area, understand the demand for development and know the potential value of the land you want to invest in.
Strategy 2: Buy and Develop as a Value Add
If you want to get to profit quicker on your land investment, you might consider developing the land for use. This includes not only purchasing the land, but getting permits and regulatory approval to add improvements like public utilities and residential or commercial zoning.
You can take it one step further — if you have deep pockets or investors — and actually hire developers to build residential homes or commercial workspaces. This will take a lot more upfront capital to develop land your purchase, but the possibility of selling or leasing the land out can happen much faster if you make the land usable.
Strategy 3: Buy and Subdivide
The goal of buying land is to create income through leasing, or building equity and selling it for a profit. If you want to create value without developing the land yourself, you may consider purchasing land to subdivide.
If you can find a large enough plot of land that allows subdivision, you can purchase it in a single transaction, then subdivide the land to sell individually to developers or individuals that can build on the land.
Ideally, your land has utility access or is zoned appropriately for the type of buyer you want to sell to — i.e. commercial or residential developer.
Every state, county and city have their own laws around subdivision and zoning, so it’s important to research local laws before purchasing a plot of land to subdivide.
Strategy 4: Buy and Lease
You can use this to generate income from farmers, hunters, or companies — cell towers, for example.
If you want to hold onto the land but generate income while waiting for it to appreciate in value, you can buy land and lease it out to businesses or individuals. You can buy land and lease it out to farmers, hunters, or even commercial businesses that need land to operate.
In general, you’ll want utilities or at least the proper zoning for the types of businesses you want to attract. For example, if you want to lease land to a farmer, you need to purchase land zoned for agricultural use.
You might also lease land to businesses, such as cell phone companies, that need a spot to put up and maintain a cell phone tower.
Keep in Mind
Some mineral resources can’t be privately mined, and you’ll need to ensure that the land you’re buying comes with “mineral rights” before harvesting resources below ground — especially oil and gas.
What Are the Pros and Cons of Investing in Land?
Investing in land can be a pathway to profit, but comes with its fair share of risks. Here are a few pros and cons to consider before buying a piece of land.
| Pros | Cons |
|---|---|
| Low ongoing expenses: No utility bills, renovations or maintenance. | Illiquidity: Land can be hard to sell quickly, tying up capital. |
| Cheaper to cover and own: Lower insurance and property taxes. | Ownership ambiguity: Prone to unclear titles and property disputes. |
| Less effort in ownership: Hands-off compared to managing properties. | Legislative risks: Zoning or regulation changes can limit land use. |
| Reduced competition: Avoids bidding wars common in home buying. | Fraud: Risk of scams like misrepresentation or double sales. |
| Multiple paths to profit: Sell, lease, flip, or hold long-term. | Natural hazards: Floods, fires, and disasters can devastate land. |
| Rapid appreciation: Land appreciates faster than built properties. | |
| Portfolio diversification: Not tied to stock, bond or housing markets. |
How To Finance a Land Purchase
As with any investment, you have to pay to play, but your success can depend on how you choose to finance your land purchase.
Pay With Cash
Like home buyers, land investors who pay with cash enjoy:
- Competitive advantage
- Stronger negotiating position
- Faster closing process
- Fewer fees
- No interest payments
Land Loans
Land loans, or lot loans, are specialized financing that mortgage lenders and banks issue. They follow the same principle as traditional mortgages, but since there is no existing home to secure as collateral, interest rates are typically higher, and often require larger down payments.
Seller Financing
Sellers who own their land can finance the sale themselves. This can benefit buyers who might want to avoid traditional banks or have trouble qualifying. The seller benefits by controlling the loan terms and rate, collecting interest payments on top of the sale windfall, and retaining the title until the loan is paid in full.
How To Invest in Land With Little or No Money
You don’t actually need a huge sum of money to invest in land. Here are a few ways to invest in land with little or no money down:
Land REITs and Crowdfunding Platforms
If you want to invest in land without actually owning any, land REITs can be a good option. You can invest in an REIT exchange-traded fund (ETF) such as Vanguard’s VNQ or Gladstone LAND to gain exposure to different types of real estate and land investments.
Crowdfunding platforms may also allow you to invest in land through a sponsor that owns and operates the land, with you owning a piece of the investment passively.
Partnerships
If you don’t have any money up front but still want to invest in land, you may consider working with a partner. If you can find the deals to get land at a discount, your partner could fund the purchase, and split the profits with you. Just make sure you have a solid contract in writing before doing any business with a partner.
Lease Options and Land Contracts
If you have an entrepreneurial spirit, you can play middleman for buyers and sellers. You can scout out opportunities, find businesses that might want to lease land, and connect the landowner with the seller to create a lease option agreement. You can collect a lease option fee to earn money without ever buying or selling land yourself.
Types of Land You Can Invest In
Most land investments fall into one of four broad categories.
| Type of Land | Description |
|---|---|
| Residential land | – Single- or multi-family housing – Designated for dwellings like homes or apartments |
| Commercial land | – Zoned for businesses or retail development – Includes warehouses, offices or other enterprises |
| Agricultural land | – Used for farming, ranching or pastures – Supports livestock or crop production |
| Undeveloped land | – “Raw” land with minimal or no development – Potential for future use or conservation |
Checklist for Buying Land
If you’re serious about investing in land, keep an eye on these steps.
1. Define Strategy and Budget
- Decide your investing strategy, e.g., hold, develop, lease.
- Set a maximum budget that includes purchase and any additional costs.
2. Secure Financing
- Get preapproved from a trusted lender experienced with land loans.
- Have cash available for down payment and closing costs.
3. Verify Zoning and Land Use Restrictions
- Confirm the land can be used for your intended person.
- Check any local zoning laws or land-use limits ahead of your purchase.
4. Check Access and Utilities
- Make sure there’s road access and the ability to hook up utilities — water, sewer and power.
5. Review Property Survey
- Verify the boundaries, dimensions and any easements on the land.
6. Investigate Title History and Liens
- Check for any outstanding claims or debts against the property.
7. Submit a Formal Offer
- Work with a real estate agent to draft a purchase agreement with contingencies.
8. Open Escrow
- Use a neutral third-party title company or attorney to handle payments and the transaction securely.
9. Secure Title Insurance
- You might consider getting title insurance to protect yourself from potential ownership disputes.
10. Finalize Closing
- Do a final walkthrough and sign all the documents to complete your purchase.
Your Next Steps in Investing in Land
Buying land can be a great way to make a profit, but it can be a risky investment. Understanding how to properly value land, knowing the zoning laws, road and utility access and local market can help you avoid costly mistakes when buying land.
Make sure to thoroughly research any land you wish to purchase before making an offer, and work with a qualified real estate agent that knows the area and market to help you find the best deal.
FAQs on Investing in Land
Not sure where to start? These FAQs on how to invest in land might offer more insight.- How much does it cost to invest in land?
- Many variables impact the investment price, but land can be a cheaper alternative to buying physical property — though it comes with risks and expenses.
- Can I build on any land I buy?
- No. Strict zoning regulations determine what may be built and where. They vary by location and can change before you can sell your land.
- How do I know if land is a good investment?
- Like any investment, land is a wise purchase only if it matches your goals, strategy, lifestyle and budget.
- Is land a better investment than houses?
- Buying land can be a good investment, but it's hard to say whether buying land is a better investment than a house. Investing in land may cost less up front, but yield lower returns, depending on your investment approach.
- Can you really invest in land with no money down?
- If you work with a partner that pays for the transaction while you scout out the deal, you can invest in land with no money down. But you'll need a formal agreement for how to split up the ownership of land if you don't put any of your own money into the deal.
Chris Chisholm contributed to the reporting for this article.
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- MineralWise. "Oil and Gas Basics for Mineral Owners."
