Is buying a building lot a good idea for Boise real estate investors?

With all of the ups and down over the last few years in the Boise real estate market, many investors are left to wonder if it is yet safe to purchase and invest in land. As with any form of investing, investing in land has inherent risks, but you can minimize them by following these practices.

Getting a loan may make things easier on your wallet but involving the bank only costs you more money in the long run. By keeping the bank out of the equation, you will maintain control over your own situation and be able to make decisions based on logic, instead of fear. The likelihood of facing a foreclosure or being dispossessed of your property in any other way is greatly diminished when you own it free and clear. I realize this is not an option for most people, so maybe consider it as an ideal more than anything else. For those whom this strategy is a possible or realistic one, Boise real estate is the safest place to store your cash, and avoid being taxed on it.

Keeping your Boise real estate that is free of debt as rental or income properties is a great way to compile a source of income that is always there when you need it. Let us say you earn $300,000 per year in your business and the income tax for your tax bracket would simply take about half of that amount, if not more. Using your tax money to purchase real estate, instead of simply paying it directly to the IRS, is easier than you might think, and will effect your net sheet in such a way that you will actually pay less in taxes. As always, get the input of your accountant before you try anything like this or you may end up costing yourself.

Buying building lots for investments can be more risky because there is an over abundance of inventory in most U.S. markets, due to overzealous lenders and developers during the boom earlier in the decade. You can get some very good deals on the building lot market, especially when buying reo lots in bulk. The best investment plan for buying building lots would be a longer term plan that involves buying and holding, due to the fact that they will not yield much, if any, profit for some time in the short term.

Keep in mind that the bank is not your friend when buying real estate, so buying with cash is always the best option. You can even start a partnership with a local builder to build income housing on your lots and split the money, to begin to establish a positive cash flow on lots that otherwise would not be paying you much if any income.

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