One of the great things about real estate is that there will always be a demand for property. People need it to live in, work in, play in, sometimes all three. But with the high standards of living that great first world nations like America enjoy, it’s natural that population is going to continue to grow, whether through immigration or childbirth.
That means that for those thinking long term, there is always a point on the horizon where people will need more land with more new property. America is fortunate to be in a position where it can often afford to build “out” rather than “up,” as some very small, land poor nations are forced to do.
This means that for people that are willing to do a little research and explore which regions are going to grow, it’s very easy to get ahead of the curve and anticipate where the demand for more property is going to be. Then it’s just matter of making sure you’ve already got a piece of that land when the time finally comes.
This is where land or lot loans come in. Financing the purchase—or even improvement—of a piece of land is a very strategic move. If you’ve predicted correctly that the area becomes a desirable one for expansion and development, you’re in a position to reap great profit. But this means being able to move quickly, especially if others are also beginning to make the same deductions that you are about a particular area.
Land loans, as with many other types of hard money loans, can benefit from faster approval times, and fewer restrictions on the conditions of approval. But it’s always important to make sure that the risk you’re taking is a calculated one. Actual maintenance of a land loan requires more effort on the part the borrower than conventional “soft” loans from banks, because the loan is being made based on your own assurances of success.