Land Investment: Should You Invest In Land For Sale In Florida?

Reprinted from Mashvisor

If you have your eye on land for sale in Florida, the chances are you have questions about what it takes to invest—or if it’s even a good idea.

Bottom Line

Many experienced real estate investors will argue that investing in land rather than a property is the way to go. There are many exceptional offers to be found in the Florida real estate market when it comes to properties and land—but it can be challenging to make a final decision on the matter.

The land is often overlooked in properties, but it can be a perfect addition to your investment property. That being said, should you invest in land for sale in Florida or stick to the investment property?

Continue reading to find out whether it’s a good idea and learn the pros and cons of investing in land for sale in Florida state. We’ll answer your questions about purchasing land in the Sunshine State in this guide.

Is Buying Land in Florida a Good Idea?

Investing in land can be ideal for a new investment opportunity, especially in the Sunshine State. Many people opt to buy land because it’s a limited resource—and it won’t lose as much value as other types of investments.

What’s more, the land is relatively affordable and costs significantly less than property—you can find land for sale in Florida under $5,000 pretty quickly. The Florida real estate market has plenty of land to offer—but, as always, there are a few things to keep in mind as an investor.

Land can be a good thing to invest in the state, but that generally depends on the lot in question. Flood zones may be much cheaper, but you will need to fight the floods all the time—especially if you want to use the land to build something. Moreover, wetlands are almost always covered in water, so you must pump the water out or build some kind of barrier to prevent it from coming back.

On top of it, there is plenty of land with wells on them—meaning you’ll need to remove the wells in order to turn the land into a construction site. And that’s a whole new challenge that we won’t be going into here. So, unless the land you have your eye on is the only one you want, we strongly advise that you broaden your search.

Generally speaking, buying land in Florida can be an excellent idea, but if the land is designated as a wetland or in a flood zone, it can turn out to be the worst idea imaginable. As shown above, managing land in a flood zone or building on wetland can—and will—require a lot of special permits, time, and money.

Buying Land for Sale in Florida vs. Buying a House: Advantages and Disadvantages

As previously mentioned, buying land can be affordable—and many investors have no trouble finding land for sale in Florida under $10,000, which is just one of the things that makes it high in demand.

Before you make the final decision and buy land, you must consider the advantages and disadvantages of purchasing land versus purchasing a home before you settle on one—or the other.

Option for Different Strategies

Different strategies to generate income from your investment make houses and land for sale in Florida attractive for purchase. With houses, there is generally a variety of ways you can see a return on investment, including house flipping, buy and hold, renting, wholesaling, and so many more.

On the flip side, land typically presents investors with only two options—building a property and using the buy-and-hold strategy. Luckily, as it turns out, the buy-and-hold strategy is the best one of all—and it applies to houses and land alike.

Financing

Getting the financing for a property is not truly an issue—and there is a broad set of options on how to get the needed funding. Even with a lower credit score and low disposable income for a down payment, you can still find a way to acquire property.

Financing for land is more complicated than financing for the property, though. Many banks and financial institutions aren’t open to investments in the land because the land is generally associated with a negative cash flow. If the lender agrees to a loan, you should expect higher down payments—and monthly payments in general.

Purchasing property is associated with lower down payments. The monthly payments for the mortgage are consistently lower, too, due to the overall lower risk and higher appreciation of the property.

With that said, if you are looking to invest in property, you can always consult with a few different banks—and get the best interest rate and payment plan.

Maintenance

Although often overlooked, maintenance is one of the things that makes buying houses so much more time-consuming. The land usually requires minimal maintenance, aside from paying taxes and eventual bills. Make no mistake about it, though.

If you’re looking for homes with land for sale in Florida, you may be presented with plenty of additional work around the house. Homes require repairs, renovations, and various upgrades, while the land is pretty much as-is. Unless you plan to build on it, it can stay put without too much—if any—maintenance.

Cash Flow

If you are looking for positive cash flow—and you should be—it’s natural to stick to houses since they can generate positive cash flow without any issues. All you need to do with a home is find tenants for your property—and you can pretty much count on a positive cash flow. It can also generate more money for future investment properties.

Of course, land can also generate a positive cash flow with some work, but houses still generate income faster. And if that is what you’re looking for, houses have a clear advantage. Houses can even cover their expenses with the rent from tenants, and while land can do that too, it takes a lot of time.

Land doesn’t come with rental income, and with that, a positive cash flow—meaning you can be presented with a negative cash flow and flat-out lose money. Even with the real estate appreciation over time, it’s possible that it won’t be enough to cover the costs of the land in the meantime, meaning you’ll lose money on your investment rather than the other way around.

Investment Success

When investing in property, you have more control when it comes to success. Appreciation is an advantage—but there are other things you can do to ensure your new investment venture would generate positive cash flow.

The house appreciation is immediate with upgrades and repairs; your house instantly becomes more valuable. It allows the investor to set higher rent rates—generating more income every month. So, updates are almost always a lucrative decision.

When investing in land, you must wait a long time to see success. Appreciation applies to land too—but it takes a while to kick in. To see real success, you must build something on that land, and that can cost much more than simply buying a house that’s already built.

Which County in Florida Has the Cheapest Land for Sale?

Before you settle on finding land in Florida for a couple of thousand dollars, you should remember that you often get what you pay for—and yes, we mean it quite literally.

You can’t expect to find the cheapest land and get all the things you are looking for in a property. Cheapest land often comes with no utilities, and it’s likely located in the flood zone or designed as a wetland. You also need to take note of zoning laws, which might prevent you from using the land in a particular way.

The cheapest county to buy land in—according to the price for one acre—would have to be Bay County. Polk County, Jackson County, and Brevard County are other affordable locations to invest in when it comes to Florida.

Smaller lots are, of course, even cheaper. So, if you’re looking for a small lot, be sure to check the listings in Putnam County, Highlands County, Washington County, and Duval County.

How Much for an Acre of Land in Florida?

An acre of land in Florida can cost as little as $3,500. That’s pretty affordable, considering that it is located in Bay County, which is home to a few high-cost properties—especially in Panama City.

Bay County has plenty of state parks, so you should consider using the land to build a charming vacation rental that can present you with a good cash flow and extra income. But as we have mentioned earlier, you must keep an eye on the zoning laws in the area, as they can prevent you from building anything at all.

If you’re looking for smaller pieces of land, you can easily purchase 0.25 acres for under $2,000 in Highlands County, about 50-60 miles from Tampa.

How to Find the Best Land in Florida?

Using real estate apps can help tremendously—but they can only get you so far. Once you’ve settled on finding land for sale in Florida by owner, you must begin searching for that piece of land—and the best way to do that is using Mashvisor’s Property Finder.

Property Finder allows you to find the best land in the selected—or top-performing—areas. The land (or property) is filtered according to the user’s preferences and only takes a few minutes of their time, saving time and money.

Forget about spending hours scrolling online; all users need to do is put in basic information and wait a bit before they are presented with the best pieces of land that fit their investment strategy. The information includes:

• Location
• Type of property (such as land)
• Budget
• Investment strategy

Where’s the Best Place in Florida for Investment?

Finding cheap land for sale in Florida can be extremely challenging, especially for someone still finding their way around the real estate business.

You want something that will offer a good return on investment—not just a piece of land for sale at a low price. All of that is impossible without a good investment portfolio, and for that, you’ll need a property in Florida to rely on—such as farm land for sale in Florida, for example.

That said, here are the best places to invest in Florida at the moment, according to the latest Mashvisor data, arranged from the highest to the lowest traditional cash on cash return:

1. Delray Beach

• Number of Listings for Sale: 236
• Median Property Price: $650,318
• Average Price per Square Foot: $349
• Number of Traditional Listings: 978
• Monthly Traditional Rental Income: $2,670
• Traditional Cash on Cash Return: 3.52%
• Traditional Cap Rate: 3.65%
• Price to Rent Ratio: 20
• Walk Score: 87

2. Port Charlotte

• Number of Listings for Sale: 225
• Median Property Price: $506,170
• Average Price per Square Foot: $270
• Number of Traditional Listings: 168
• Monthly Traditional Rental Income: $2,117
• Traditional Cash on Cash Return: 3.56%
• Traditional Cap Rate: 3.64%
• Price to Rent Ratio: 20
• Walk Score: 53

3. Port St. Lucie

• Number of Listings for Sale: 174
• Median Property Price: $473,047
• Average Price per Square Foot: $234
• Number of Traditional Listings: 278
• Monthly Traditional Rental Income: $2,164
• Traditional Cash on Cash Return: 3.27%
• Traditional Cap Rate: 3.35%
• Price to Rent Ratio: 18
• Walk Score: 57

4. Rockledge

• Number of Listings for Sale: 85
• Median Property Price: $466,722
• Average Price per Square Foot: $231
• Number of Traditional Listings: 165
• Monthly Traditional Rental Income: $1,946
• Traditional Cash on Cash Return: 3.24%
• Traditional Cap Rate: 3.32%
• Price to Rent Ratio: 20
• Walk Score: 14

5. Homestead

• Number of Listings for Sale: 201
• Median Property Price: $512,675
• Average Price per Square Foot: $235
• Number of Traditional Listings: 683
• Monthly Traditional Rental Income: $2,169
• Traditional Cash on Cash Return: 3.11%
• Traditional Cap Rate: 3.19%
• Price to Rent Ratio: 20
• Walk Score: 88

Bottom Line

So, should you invest in land for sale in Florida? Yes, you absolutely should. With plenty of research about the county zoning laws and a decent portfolio, investing in land can be the perfect addition to your passive income.

However, it may be difficult to get away with buying just land without properties in your portfolio. For new real estate investors, it might be better to opt for traditional Florida investment property or start a vacation rental business.