Real Estate Investor Magazine July/August 2023 Edition | Page 82


For those with plenty of patience and very specific ideas for their ideal property , however , building from scratch can offer significant benefits says David Jacobs of Rawson Property Developments . He shares 5 advantages of investing in vacant land .

Lower Purchase Price
“ The most obvious benefit of buying vacant land , as opposed to predeveloped property , is that the purchase price is going to be a lot lower ,” says David Jacobs of Rawson Property Developments .
This means pretty significant savings on both transfer duty and municipal rates , which are based on purchase price and property value . A lower purchase price doesn ’ t necessarily mean easier finance . Most lenders will only finance up to around 60 % of a vacant property ’ s purchase price .
“ Land buyers generally do need to put a much bigger deposit down on a vacant land purchase . The upside is that you end up paying much less in interest over the lifetime of the loan , which can make a big difference in terms of total cost ,” says Jacobs .
Strategic potential
With populations growing and cities busting at the seams , new residential pockets are popping up all over the country . Savvy investors can jump on soon-tobe trendy spots which could see significant returns on their vacant land investment before so much as digging their first foundation .
“ It ’ s less risky , of course , to buy land in an already established neighbourhood when possible , but this is inevitably more expensive and may not have quite the same growth potential ,” he says .
Blank slate
One of the more popular benefits of buying vacant land is the fact that you don ’ t have to deal with anyone else ’ s construction mistakes or poor design choices . That means no home inspections to uncover latent or patent defects , and no immediate maintenance
41 JULY / AUG 2023 SA Real Estate Investor Magazine