5 Reasons To Sell Your Land Now

The recent pandemic has shown that location doesn’t matter as much as it used to. Many workers now have the flexibility to work remotely from anywhere there is an internet connection. Now, more than ever, workers can look for available home options never before possible because of affordability and commuting distance.

This new reality allows people to now have the freedom to live where they want and no longer worry about the daily commute. For many, this includes the option of moving away from urban areas filled with smog and congestion and back to small towns where life moves at a slower pace. Families are looking for good schools in quiet neighborhoods and with many occupations seeing increased wages, building a home and living the American dream is entirely possible.

If you’ve considered selling your land but weren’t sure of the timing, the reasons mentioned above and the ones we’ll mention below will show you why there’s no time like the present.

Here are five reasons to sell your land now and take advantage of a fantastic real estate market.

How Strong is the Real Estate Market?

The demand for real estate will stay strong nationally as the country continues to recover from the pandemic. Many workers who lost their jobs or were forced to close businesses can now seek opportunities elsewhere. Across the country, rental prices continue to rise and in many communities, not only is it challenging to find an affordable apartment or home to rent, it’s almost impossible to find anything to rent as many towns suffer from housing shortages.

As the shift continues away from urban areas and into rural settings, buyers are looking for ways to have a home while having a smaller carbon footprint. In addition, the price of lumber and the scarcity of other essential building supplies have shifted the way many think about the home-buying process.

The great thing about owning vacant land is the opportunity to do what you want with it, or at least what’s allowed by local ordinances. With rental prices so high, tiny homes, recreational vehicles, and other manufactured structures are now a viable option. With the purchase of a small plot of land buyers can have the foundation to live the life they desire while still being connected to the outside world.

Have Your Plans Changed?

Did you purchase property with the intent to build a retirement home or to use it for recreational purposes, and your plans have changed due to economic hardship or other personal reasons? While some try to plan out every aspect of their future, life sometimes takes a turn and heads in a totally different direction. If your life plans have changed and you find yourself no longer needing the land you inherited or purchased, choosing to sell it can bring a much-needed financial benefit.

Are the Taxes or Dues Too High?

As the nation faces record consumer prices and inflation, many local towns and communities struggle to keep up by raising taxes. In addition, as the shift continues to work from home, many heavily taxed states like California and New York are losing residents as they relocate to states with better tax rates.

Another reason why now might be a good time to sell your land is that the HOA fees or membership dues required to own property in certain developments have gone up or are just unreasonable.

If you bought your land at a low price and it has increased significantly in value, you could save money on your taxes by selling it now. The capital gains tax is a tax on the profit made from a non-inventory asset. In simpler terms, the difference between the purchase price and the selling price of your land is considered profit, and you’ll have to pay taxes on it in most cases. Alternatively, if you overpaid for your property and ended up selling it for a loss, you can use that capital loss to offset any capital gains.

Although selling at a lower price might not make sense, the tax benefits outweigh the lower selling price to some with complicated investment portfolios. Of course, consulting with a tax professional is the best way to know if this applies to your situation or not.

Mortgage Rates are the Lowest in History

If you have a good credit score, then applying for a mortgage right now is the first step in the home-buying process. With a vacant land purchase, you have the opportunity to design and build your home while paying thousands less in interest than those who pursued the same dream in the early 2000s.

Before the housing bubble burst in 2008, the average annual percentage rate for a 30-year fixed mortgage rate was above six percent. By comparison, the same 30-year fixed mortgage rate in today’s market is less than 3.5 percent. Over the life of the loan, this equates to paying over $145,000 more in interest on a $250,000 mortgage.

While mortgage rates are generally higher for land-only purchases, they are still lower than previous years. To qualify for a loan on vacant real estate, buyers will typically have to have a larger down payment. Mortgage companies will consider your intentions with the property–whether for recreational purposes or to build a home–and will often base your rate on that.

As a seller, one option to keep in mind is owner-financing with a land contract. If you have found it challenging to attract the right buyers, owner-financing can be an attractive selling point and increases the odds of selling your land quickly.

Low Inventory

Vacant land is a limited commodity. There’s only so much of it, and it doesn’t matter if you’re looking to buy or sell because today’s favorable economic climate is good for business. Low-interest rates mean new homebuyers can build their dream home with affordable terms, and landowners looking to sell can get record prices for the land they no longer want or need.