One of the key benefits of buying vacant land is that it is almost always cheaper than buying an improved lot. All things being equal, a piece of property that has a building on it will be more valuable than one with nothing. Even if a building is worthless, the owner of the land will have to pay to demolish it
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Maximum Flexibility
When you have an unimproved piece of land, you have a blank canvas on which you can do whatever you want within the limitations of your jurisdiction’s zoning and building codes. If you are building a house, you can choose between having a big front yard or a bigger back yard. With commercial properties, you might have the ability to choose between building different types of buildings or between building one large building or a few small buildings for single tenants.
Minimal Carrying Costs
Since vacant land is less expensive than a comparable improved property, it usually costs less to own over time. If you have a mortgage, the payments will usually be lower, and your property taxes and insurance will be less. Although you might need to do some maintenance like mowing or trash removal on your lot, it will usually cost less than keeping a building on the property in good condition.
Long-term Appreciation
Unlike buildings, which gradually fall into disrepair if they are not maintained, vacant land will usually remain in the state in which you bought it unless an external force, like erosion or earthquake, has an impact on it. With this in mind, vacant lots typically track the market very well. This can make them better long-term stores of value than improved properties, which usually lose value if they do not receive periodic capital improvements.
Significant Appreciation Potential
Vacant land can also be an excellent investment for speculative investors. Land in areas that go from undesirable to desirable can offer extremely high returns. This can happen because of large fundamental shifts, like the development of the Las Vegas Strip, Walt Disney World, or large business centers, or it can happen because of parcel level changes like upzoning land from residential to commercial uses.
