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Entrepreneurship
Land can be a lucrative investment opportunity, whether you purchase property in the city or rural areas. That said, how you use the plots impacts how fruitful your investment will be. Earning money from land can occur in a few ways. Buying land for business use is an option, while others learn how to convert land to commercial properties. Here’s a guide to making your land a business commodity and earning extra income.
The most accessible way to make your land a commodity is to use existing property for money-making ventures. Here are a few ways you can make money off your land.
An accessible way to make your land a commodity is by starting a garden. Grow fresh flowers, fruits and vegetables to sell at local farmers markets and make a profit. Find crops that will make the most money in your community. For example, hemp has quickly become a cash crop because of its broad uses. Experts say hemp use had a $687 million value in 2021 and about $38,938 per acre in gross production.
Another agricultural business opportunity lies with farm animals. Your land could become a commodity by raising chickens, goats, rabbits and ducks. The birds can produce valuable eggs for your kitchen, letting you sell them at local stores. You can also generate income from milk, meat, fur and other animal products. These animals require some infrastructural investments but generate long-term profits if you stay determined.
Renewable energy demand has grown recently due to calls for sustainability. Solar power is second only to wind power in the U.S., as experts predict it will grow 75% from 2024 to 2025. Why does that matter for entrepreneurs? You can install solar panels on your property to generate electricity. When you harness power, you can sell it to the electricity grid and receive financial compensation through utility discounts.
Your land becomes even more valuable when you have timber. Consider sustainable timber harvesting on your property because some woods could have high demand in your area. Trees can take years to grow, so consider species that will bring faster revenue to your land. Bamboo is the world’s fastest-growing plant, with nearly a meter increase daily. Companies buy this plant for construction, biofuel, paper and other valuable industries.
Another way to make your land a business commodity is to convert it for commercial use. Entrepreneurs may desire increased property value or unique business opportunities. Here’s how to convert land to commercial property.
Local zoning laws will be the first obstacle to converting your land. These regulations determine which sections of the city are for residential, commercial and industrial use. If the map doesn’t include your land in commercial or mixed-use zoning, you’ll need to request a zone change. Entrepreneurs go through a similar process when operating short-term rentals, such as Airbnb.
This step is crucial because your tax obligations will change with a commercial property.
Next, you need to fill out the proper paperwork to ensure your legal and tax paperwork is in order. These documents may include licenses and permits, which can take time because of red tape. If you convert your land to commercial property, you must know how to fill out a planning permission form. This record requests your local government for permission to develop land. Leaders will decide on regulations and tax obligations for using this commercial property.
Another crucial part of your land conversion will be an environmental impact assessment (EIA). This evaluation determines how commercialization will affect the land and the surrounding ecosystem. The EIA will estimate the environmental impact of losing trees and using machines on the property.
The fate of your zoning request will likely rely on the local city council, so engage with these leaders to support your efforts. City council meetings are an excellent resource to speak to these government officials and persuade them to approve your request. You’ll also talk to community members to hear their input, so this forum is a chance to change their minds. If the city council isn’t in charge, check your area has local planning and zoning commissions.
If you have a business or plan to start one, you may need physical space to begin your venture. Here’s what you need to know about buying land for business use.
Real estate investment is attractive to entrepreneurs because it typically doesn’t require much effort to maintain. Your attention will primarily focus on maintaining utilities and landscaping. What makes property low maintenance? Look for how much of the land will need manipulated or cleared. Stumps under 5 inches in diameter are easy enough to remove with a brush grubber, but larger trees may require heavier equipment. Flat land is easier to landscape and prevent erosion. Your property also benefits from well-draining soil because it won’t need many fertilizers or outside help.
Market research is the crucial first step because you must know the status of the land you want to buy. How much has it appreciated in the last decade? Property typically grows in value, so find a lot near a growing city or suburb. One to consider is farm real estate because its appreciation has been steady in the last few years. A 2023 report shows farmland appreciated by 7.4% between 2022 and 2023.
Finding valuable land can be challenging if you aren’t from your targeted area. Research can only take you so far — it’s crucial to network with people who know the area well. These professionals have invaluable insight for newcomers because they will know title restrictions and how to develop sites. Developers can also give you the inside scoop on what hidden gems lie around the area. Your diamond in the rough could produce lucrative returns in the future.
Buying land for business use may take years to provide a return on investment (ROI). This wait may include factors out of your control, such as market fluctuations. The economy could determine how fruitful your investment is in the short and long term. That said, there are considerations you can put in your hands. For instance, you could lease parts of the land for easy passive income. Storage units are an excellent venture if your area has demand.
A greater population means the land you own becomes more valuable. This demographic shift is significantly increasing demand for commercial real estate, increasing the potential returns on your property investment. How can you leverage your property to make money? Research local regulations on commercial land and take advantage of the plots you own. Understanding these regulations will make it easier for you to identify lucrative opportunities for development.
Market research is crucial to ensure your property generates income and makes your land a commodity. By analyzing market trends and consumer demands, you can optimize your strategies to meet the needs of a continually growing market, ensuring the highest possible return on your investment.
Alex Quin is a full-stack marketing expert and global keynote speaker. Founder and Chief Marketing Officer of UADV Marketing - a member of the Forbes Agency Council.
