I am 22 and i just bought a piece of land in Sebring/Lake Placid. I didn't take any loan, it's owner-financing

Question

and the payment is less than $300 a month. Do you think it's a good idea? because over there is not develop yet, and I am young I don't know when i will be able to build on it. What do you think?

Sebring/Lake Placid is in Central Florida.

Answer 1

Purchasing raw land can be very speculative and risky. Did you go and actually look at the land? Did you check the zoning? Did you check for environmental issues (flood zone, etc)? One of the most prevalent real estate scams (just go to eBay to see it) is to sell junk land for low monthly payments on an installment sale/land contract.

There are so many bogus subdivisions out there (small lots in the middle of nowhere) that will never be worth anything, because its already subdivided there isn't any unified plan for development, so it never gets developed.

You're better to spend the money on a mortgage on a small condo that you can actually live in while you accumulate equity. If you're on a land contract, you can get out of it simply by not paying amymore.

Answer 2

Sorry to burst your bubble but there are too many unanswered questions. 1, what is the size of the lot you have purchased, 2. Is it considered a 'buildable lot'. 3. What are the restrictions of building on that lot. 4. What interest rate is the Seller giving you. 5. What are the restrictive covenants with how you can use the land. 6. Is there a specified time you've been given, in the terms, in which you have to have built a structure.

Owner-financing is a loan. The terms may/may not be higher than you could have secured with a mortgage lender. But, at least you've gotten started. Now that you're in, you must read the fine print.

Answer 3

Good for you to think ahead while you can. Property is the best way to make money/plan for the future. Be careful tho because with a seller financed loan like you have depending on how it was written up you could forfit the land and any money you all ready payed by being late on just one payment. It doesnt go through a regular process like it would with a bank loan. Be sure to read it very carefully so you know where you stand in the event of a unforeseen hardship.

Answer 4

Could be a bargain; could be worthless. Depends on the land. Nonetheless, hats off to you for taking a shot at it.

Considerations:

1) I trust you went through an attorney or settlement company for the closing. (proving that the owner a) actually owned the land and b) actually sold it to you legally and you aren't just paying the owner money for fun.)

2) That the land is in fact developable. A lot of land in Florida is not. I hope it's high and dry, not low and wet.

Florida is known for tax sales where the owner buys land thinking it's buildable (or being told it's buildable - lied to...) when it isn't. ...which makes it worthless, but not to the tax assessor, who will auction the property off to the highest unsuspecting bidder when you stop paying taxes on your worthless land. It then becomes then new buyer's problem.

Good luck.

Answer 5

I really commend you for taking the initiative and investing in real estate. At your age most women are throwing their money away in Shopping Malls for stuff they eventualy throw away. I live in California and I dont know where your property is located. Moreover I dont know how much you paid for it. Hence I cannot tell you if it is a good or bad investment. However if one takes into account the fact that new land is not being made (what yu see is all we have got) and that the population of the world, including the the US, will double by the yr 2050... I would venture out and say it's a great investment. I hope you are not paying too much for up-keeping and taxes. (all tax deductible, however) Congratulations... You have a bright future in finances.... keep it up.

Answer 6

It is a little late to ask. I live in South Florida. The area you mention is excellent for investment in land.

There is a limited supply of land, obviously. When it's gone, it's gone.

The problem with undeveloped land is that it is non-income producing. You have to pay taxes and make payments on something that is a long term investment. If you can keep it up you will do allright.

Answer 7

There is nothing that can go wrong with owning land. Even if you never build on it, you will always have collateral. I am looking for land and at $300 that sounds good. The ground I am looking at is $600. Hang on to it.