Knowing the alternatives that are available to obtain short-term returns with the purchase of commercial land is essential to establish objectives and create business strategies .
Knowing how to make money with land without having to build will help those who do not have an immediate project construction planned, and who also hope to obtain an extra income from their investment .
When it comes to investing in a commercial lot, most people consider – as part of the investment – the construction of a premises to rent and begin to earn monthly income.
However, there are other options to put this investment to work without having to build a property, and choosing the most convenient one will depend on the location of the land, the surface area and investment objectives.
How can I make money with undeveloped land?
Land is a limited product and as such, it does not require the construction of a property to make it productive , since the demand for these spaces offers a wide range of opportunities to obtain short-term returns.
Whether from the planning of the project you have no intention of building or due to lack of resources, we will tell you about the main options to generate income with a land without construction .
There are many vacant lots that are only waiting for the years to go by to increase their value. However, there are several business ideas to make money with a piece of land that you can implement, then we will talk about the most popular ones and what provide greater benefits.
(1. Sell the land
Considering that the investment of a land can increase between 12% and 20% per year – as long as it is in an area of accelerated growth – putting it up for sale is one of the ways to earn money in the medium term without investing a lot of capital or effort in operation .
The key to getting the most out of the property in this way, is to wait a few years for it to acquire a greater value to obtain a high Return on Investment (ROI) , however, this period will depend on the objectives of each investor and the time in you expect to recover your investment.
To be able to obtain the expected profit margin, the land must have special characteristics, which are:
• Location: If you want to see an accelerated increase in the value of your property, location is essential. Acquire in an area of high capital gain that guarantees medium and long-term returns. Each city has privileged areas, for example, in Mérida the area with the highest value is in the north of the city.
• Accessibility: In addition to being well located, your property must be accessible, if you have the idea of buying to sell again, think about the needs of the future owner who buys it with the intention of starting a business. You may ask yourself: is it close to residential areas? Are there major avenues nearby?
• Urbanization: Most of the land is sold without public services, however there are real estate companies —such as BMF Inversiones— that put urbanized land at your disposal, which helps to increase its value.
• Price: A recommendation is to buy a pre-sale land because they are usually cheaper and provide the opportunity to earn extra money on the sale if it was bought below its market value.
• Land use: It is still possible to find land in a rustic state that is usually cheaper, however, this will only be viable if you have the time necessary to complete the paperwork that involves establishing the type of land use on the property, than Otherwise it is better to acquire one with this process already completed.
• Documents in order: To carry out the sale of a property smoothly, it is necessary to have the necessary documentation in order, which will not be a problem if since the purchase you acquired with legal certainty and keep the corresponding tax payments up to date .
If you do not intend to sell in the short term, putting it up for rent will be the most viable option , since, in addition to allowing time for its value to increase, it allows you to maintain possession of the property and even use it as collateral for a bank loan.
(2. Rent the land to franchises
Another option to earn money from land is to lease it to small businesses or franchises that seek to expand in areas with potential for commercial growth. To do so, the land must be located in rapidly growing places and meet other requirements established by companies, such as:
• Minimum surface
• Land use
• Accessibility and visibility
• Documentation in order
Opting for the rental of land to franchises is an alternative that guarantees stable and constant income in the medium and long term due to the permanence of these businesses. Furthermore, it is more convenient for these companies to rent a greater number of land than to buy just one.
The advantage of this is that it is not necessary to have a construction or premises , for example, in the case of franchises, they are the ones who build according to the specifications they require for their establishments.
This is a way to generate constant passive income , because there will always be companies willing to pay rent if your land is adapted to the needs of a business.
If you want to know more details about renting land, we invite you to read the brief guide on how to make a profit by renting land that we have prepared for you.
(3. Rent the land for parking
Lack of parking is one of the main obstacles that businesses face. If the land is located in an area of commercial growth, it will be very convenient to use it as a parking lot .
You can rent the land to someone who is willing to use it for this purpose, in this way you avoid the expenses involved in setting up a parking lot in good shape, and charge a comfortable monthly fee .
Another option is to prepare the land for parking yourself, unlike building an establishment, it will be much cheaper because it only requires paving, marking the area for the parking spaces and perhaps building a small shed .
Leasing the land with the space already prepared can generate a higher income, or in any case, if it is well located in a commercial area, the tenants themselves could rent a fixed space by paying a pension .
(4. Rent the land for storage
The rapid growth of electronic commerce has driven the rent of spaces for storage and distribution of merchandise in the industrial sector, as it represents 34% of the meters rented by the logistics sector.
Despite being a business with greater growth in the Metropolitan Area of Mexico City, regions of the country such as the Mexican southeast also offer great potential in the rental of land for storage , due to the commercial exchange that it establishes with different parts of the world. .
Since 2019 there has been an increase in the rent of spaces for logistics activities, whose main source has been e-commerce. This is a way which allows you to earn money from home using digital platforms to promote your rental properties .
If you own more than one piece of land, want to dedicate yourself to the real estate industry and want to earn money online, it would be worth spending part of your budget on an online course on the best ways to promote your properties online. You can even find one of the many YouTube channels that exist focused on this topic.
(5. Rent land for spectacular
Advertising is a fundamental part of the commercial strategy of any company, so if the land is located on a main avenue —or close to roads that guarantee high vehicular traffic—, renting it for the installation of billboards will be an excellent option. business option.
In this case, having the best location will increase the chances of reaching an agreement with an advertising company in the medium or long term , since they are always looking to place billboards or billboards on the side of a highway or main avenues.
It is a convenient alternative to obtain a monthly income without making an additional investment to the purchase of the land. According to outdoor advertising entrepreneurs, the monthly rent can be between $ 4,000 MXN and $ 40,000 MXN, depending on the entity and location.
The only procedure that must be carried out to rent a land to advertising companies is to obtain an endorsement from the city council and, in case of being located in an area near federal toll-free highways, it is necessary to request a special permit .
It is pertinent to mention that when coming into contact with advertising companies, another business opportunity related to this arises: affiliate marketing .
How does it work? If you own multiple pieces of land and are used to advertising them for lease, you may have a website . If this is the case, you can earn money online with an affiliate program .
It offers services and virtual assistance for those who have an online store or a website where advertisements can be placed . This is very simple, it is about authorizing third-party advertising on your website in exchange for receiving a commission for actions carried out by users with said ads.
This is the perfect opportunity to earn double income with billboards and web advertising.
(6. Rent the land for events and meetings
Some investors — usually first-time investors — don’t know how to make money from undeveloped land, and they don’t know that owning a large property opens up the possibility of renting it out for outdoor events .
This is an excellent business idea because a large space facilitates the installation of children’s games and furniture for meetings such as chairs, tables, and even a stage.
The benefit of this is that you only have to worry that the space is clean, with basic services of electricity and drinking water, and the rest will be handled by the banquette or the event organizer.
The location is an aspect that will come into play if you decide to rent the land for events, since, thinking about the comfort of their guests, the hosts always look for a site that is easily accessible .
For this use it is also important to consider the availability of a large space for parking , as this will help the property to stand out from the offer of land for rent for events.
The number of events for which it can be rented is wide, and ranges from birthdays, to weddings or XV years, in addition to the fact that there is also the possibility of renting it to traveling events such as fairs or circuses that come to the city and stay a couple of weeks.
One strategy to make this type of business profitable is to advertise on the most important social networks such as Facebook and Instagram. You may require graphic design services to give it a more professional image , for this you can hire freelance designers who do the work in exchange for receiving a commission.
Make a profit with a piece of land
Thanks to the possibilities of use offered by commercial land, investors have greater business options that allow them to make their investment pay off without having to allocate more capital, or wait long periods to obtain a constant income.
Earning quick money with land is possible, in addition to buying a land or investment lot is the best option to guarantee your retirement and make your wealth grow by increasing its value over the years.